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, 1999

                                       OR

           o 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 __X__ No.




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

                               INDEX TO FORM 10-Q

                    For the Quarter Ended September 30, 1999



PART I. FINANCIAL INFORMATION

  Item 1. Financial Statements

     Balance Sheets
         September 30, 1999 and March 31, 1999...............................3

     Statements of Operations
         For the three and six  months ended September 30, 1999 and 1998.....4

     Statement of Partners' Equity
         For the six months ended September 30, 1999.........................5

     Statements of Cash Flows
         For the six months ended September 30, 1999 and 1998................6

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

  Item 2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations...............................13

  Item 3. Quantitative and Qualitative Disclosures About Market Risks........14

PART II. OTHER INFORMATION

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

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

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

                                       2

<PAGE>


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

                                 BALANCE SHEETS


<TABLE>
<CAPTION>


                                                         September 30, 1999         March 31, 1999
                                                         ------------------         --------------
                                                             (Unaudited)
                                     ASSETS

<S>                                                 <C>                       <C>
Cash and cash equivalents                           $               506,519   $            509,695
Investment in limited partnerships - Note 2                       8,675,580              9,164,197
                                                        -------------------       ----------------

                                                    $             9,182,099   $          9,673,892
                                                        ===================       ================


                        LIABILITIES AND PARTNERS' EQUITY

Liabilities:
 Payable to limited partnerships -Note 4            $                16,836   $             16,836
 Accrued fees and expenses due to
  general partner and affiliates - Note 3                           640,861                552,257
                                                        -------------------       ----------------

                                                                    657,697                569,093
                                                        -------------------       ----------------
Partners' equity (deficit):
 General partner                                                    (84,887)               (79,083)
 Limited partners (30,000 units
  authorized, 18,000 units issued
  and outstanding)                                                8,609,289              9,183,882
                                                        -------------------       ----------------

Total partners' equity                                            8,524,402              9,104,799
                                                        -------------------       ----------------

                                                    $             9,182,099   $          9,673,892
                                                        ===================       ================
</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, 1999 and 1998
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                     1999                                  1998
                                       --------------------------------    --------------------------------

                                            Three               Six               Three             Six
                                            Months              Months            Months            Months
                                            ------              ------            ------            ------

<S>                                  <C>                <C>                <C>               <C>
Interest income                      $       5,059      $       10,046     $       5,261     $      10,173
                                       -----------        ------------       -----------       -----------

Operating expenses:
Amortization                                15,116              30,232            15,116            30,232
Asset management fees - Note 3              45,346              90,692            46,542            93,083
Legal and accounting                           971              10,602                 -             5,250
Other                                        6,487               4,867             2,724            16,364
                                       -----------        ------------       -----------       -----------

Total operating expenses                    67,920             136,393            64,382           144,929
                                       -----------        ------------       -----------       -----------

Loss from operations                       (62,861)           (126,347)          (59,121)         (134,756)

Equity in loss from
 limited partnerships                     (224,354)           (454,050)         (244,400)         (489,863)
                                       -----------        ------------       -----------       -----------

Net loss                             $    (287,215)     $     (580,397)    $    (303,521)    $    (624,619)
                                       ===========        ============       ===========       ===========

Net loss allocated to:
 General partner                     $      (2,872)     $       (5,804)    $      (3,035)    $      (6,246)
                                       ===========        ============       ===========       ===========

 Limited partners                    $    (284,343)     $     (574,593)    $    (300,486)    $    (618,373)
                                       ===========        ============       ===========       ===========

Net loss per limited
 partner unit (18,000 units
 issued and outstanding)             $         (16)     $          (32)    $         (17)    $         (83)
                                       ===========        ============       ===========       ===========

</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

                   For the Six Months Ended September 30, 1999
                                   (Unaudited)

<TABLE>
<CAPTION>


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

<S>                                                <C>                     <C>                   <C>
Partners' equity (deficit), March 31, 1999         $          (79,083)     $       9,183,882      $      9,104,799

Net loss for the six months ended
  September 30, 1999                                           (5,804)              (574,593)             (580,397)
                                                       --------------          -------------         -------------

Partners' equity (deficit), September 30, 1999     $          (84,887)     $       8,609,289      $      8,524,402
                                                       ==============          =============         =============

</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, 1999 and 1998
                                   (Unaudited)


                                                          1999             1998
                                                          ----             ----
Cash flows from operating activities:
 Net loss                                       $     (580,397)   $    (624,619)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
     Equity in loss from limited partnerships          454,050          489,863
     Amortization                                       30,232           30,232
     Asset management fees                              90,692           93,083
     Accrued fees and expenses due to
      general partner and affiliates                    (2,088)            (509)
                                                  ------------      -----------

Net cash used in operating activities                   (7,511)         (11,950)
                                                  ------------      -----------

Cash flows from investing activities:
 Distributions from limited partnerships                 4,335            3,838
                                                  ------------      -----------

Net cash provided in investing activities                4,335            3,838
                                                  ------------      -----------

Net decrease in cash and cash equivalents               (3,176)          (8,112)
                                                  ------------      -----------

Cash and cash equivalents, beginning of period         509,695          563,949
                                                  ------------      -----------

Cash and cash equivalents, end of period        $      506,519    $     555,837
                                                  ============      ===========



                 See accompanying notes to financial statements
                                        6



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

                          NOTES TO FINANCIAL STATEMENTS

                               September 30, 1999
                                   (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The information  contained in the following notes to the financial statements is
condensed  from that  which  would  appear in the annual  financial  statements;
accordingly,  the  financial  statements  included  herein should be reviewed in
conjunction with the financial statements and related notes thereto contained in
the Partnership's Annual Report on Form 10-K for the year ended March 31, 1999.

In the opinion of the Partnership,  the unaudited  financial  statements contain
all  adjustments  (consisting of only normal  recurring  accruals)  necessary to
present  fairly the financial  position as of September 30, 1999 and the results
of  operations  and  changes  in  cash  flows  for the six  months  then  ended.
Accounting  measurements at interim dates inherently involve greater reliance on
estimates  than at year end. The results of  operations  for the interim  period
presented are not necessarily indicative of the results for the entire year.

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  is WNC  Tax  Credit  Partners  III,  L.P.  (the  "General
Partner").  WNC &  Associates,  Inc.  ("WNC") is the general  partner of WNC Tax
Credit Partners III, L.P.  Wilfred N. Cooper Sr.,  through the Cooper  Revocable
Trust owns 66.8% of the  outstanding  stock of WNC. John B. Lester,  Jr. was the
original limited partner of the Partnership and owns,  through the Lester Family
Trust, 28.6% of the outstanding stock of WNC.

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 units amounting to $10,000 was collected
on  subscriptions  accepted 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  (as
described in Note 4) 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

                               September 30, 1999
                                   (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.

 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.

                                       8

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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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.

Cash and Cash Equivalents

The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents.

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.

NOTE 2 - INVESTMENT 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  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.

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.


                                       9
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (unaudited)


NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIP, CONTINUED

The  following is a summary of the equity method  activity of the  investment in
Local Limited  Partnerships  for the six months ended September 30, 1999 and the
three months ended March 31, 1999:
<TABLE>
<CAPTION>

                                                        September 30, 1999           March 31, 1999
                                                        ------------------           --------------

<S>                                                 <C>                        <C>
   Investment balance, beginning of period          $            9,164,197     $          9,415,032
   Equity in loss from limited partnership                        (454,050)                (229,696)
   Distributions from limited partnership                           (4,335)                  (6,023)
   Amortization of capitalized acquisition costs                   (30,232)                 (15,116)
                                                        ------------------           --------------

   Investment balance, end of period                $            8,675,580     $          9,164,197
                                                        ==================           ==============
</TABLE>

Selected  operating  information from the financial  statements of the seventeen
twelve limited  partnerships with operations and three limited partnerships with
operations for the period ended September 30 is presented below:
<TABLE>
<CAPTION>

                                                                      1999                     1998
                                                                      ----                     ----

<S>                                                 <C>                        <C>
   Total revenue                                    $            1,490,000     $          1,449,000
                                                      --------------------       ------------------

   Interest expense                                                474,000                  507,000
   Depreciation                                                    594,000                  597,000
   Operating expenses                                              900,000                  859,000
                                                      --------------------       ------------------

   Total expenses                                                1,968,000                1,963,000
                                                      --------------------       ------------------

   Net loss                                         $             (478,000)    $           (514,000)
                                                      ====================       ==================

   Net loss allocable to the Partnership            $             (473,200)    $           (508,900)
                                                      ====================       ==================

   Net loss recorded by the Partnership             $             (454,050)    $           (489,863)
                                                      ====================       ==================
</TABLE>

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 and

                                       10
<PAGE>
                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
                       (A California Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                               September 30, 1999
                                   (unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS, CONTINUED

     $93,083 were  incurred  during the six months ended  September 30, 1999 and
     1998,  respectively.  The  Partnership  paid  the  General  Partner  or its
     affiliates $0 of those fees during the six months ended  September 30, 1999
     and 1998.

(b)  Subordinated  Disposition Fee. A subordinated  disposition fee in an amount
     equal to 1% of the  sale  price  received  in  connection  with the sale or
     disposition  of a Housing  Complex or Local Limited  Partnership  Interest.
     Subordinated  disposition  fees will be subordinated to the prior return of
     the Limited  Partners'  capital  contributions and payment of the Return on
     Investment to the Limited Partners. "Return on Investment" means an annual,
     cumulative but not compounded,  "return" to the Limited Partners (including
     Low  Income  Housing   Credits)  as  a  class  on  their  adjusted  capital
     contributions  commencing  for each Limited  Partner on the last day of the
     calendar quarter during which the Limited Partner's capital contribution is
     received by the  Partnership,  calculated at the following  rates:  (i) 16%
     through  December 31, 2003, and (ii) 6% for the balance of the Partnerships
     term. No disposition fees have been paid.

(c)  Interest  in  Partnership.   The  General   Partner   receives  1%  of  the
     Partnership's  allocated Low Income  Housing  Credits,  which  approximated
     $24,000 for the General  Partner for the year ended  December 31, 1998. The
     General Partner is also entitled to receive 1% of cash distributions. There
     were no  distributions of cash to the General Partner during the six months
     ended September 30, 1999 or 1998.

The "accrued fees and expenses due to general partner and affiliates"  presented
on the balance sheets consists of the following:

                                    September 30, 1999           March 31, 1999
                                    ------------------           --------------

Asset management fee payable     $             639,586        $         548,894
Reimbursement for expenses
 paid by an affiliate                            1,275                    3,363
                                    ------------------           --------------

                                 $             640,861        $         552,257
                                    ==================           ==============

NOTE 4 - PAYABLE TO LIMITED PARTNERSHIPS

Payable to limited  partnerships at September 30, 1999 represents  amounts which
are due at various times based on conditions  specified in the respective  local
limited partnership agreements. These contributions are payable in installments,
generally due upon the local limited  partnership  achieving  certain  operating
benchmarks,  and are  generally  expected  to be paid  within  two  years of the
Partnership's initial investment.

NOTE 5 - INCOME TAXES

No provisions for income taxes has been recorded in the financial  statements or
any  liabilities  for  income  taxes,  an  obligation  of  the  partners  of the
Partnership.

                                       11


<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operation

Financial Condition

The Partnership's  assets at September 30, 1999 consisted  primarily of $507,000
in cash and aggregate  investments in the eighteen Local Limited Partnerships of
$8,676,000. Liabilities at September 30, 1999 primarily consisted of $640,000 of
accrued annual management fees due to the General Partners.

Results of Operations

Three Months Ended  September 30, 1999 Compared to Three Months Ended  September
30, 1998. The  Partnership's  net loss for the three months ended  September 30,
1999  was  $(287,000),  reflecting  a  decrease  of  $16,000  from  the net loss
experienced  for the three months ended  September 30, 1998.  The decline in net
loss is  primarily  due to equity  in losses  from  limited  partnerships  which
declined by $20,000 to $(224,000) for the three months ended  September 30, 1999
from $(244,000) for the three months ended September 30, 1998. This decrease was
a result of the Partnership not recognizing  certain losses of the Local Limited
Partnerships.  The investments in such Local Limited Partnerships had reached $0
at September 30, 1999.  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  from  limited  partnerships  there was a
increase in loss from  operations of $4,000 for the three months ended September
30, 1999 to $(63,000),  from $(59,000) for the three months ended  September 30,
1998, due to a comparable increase in operating expense allocations.

Six Months Ended  September 30, 1999 Compared to Six Months Ended  September 30,
1998. The Partnership's net loss for the six months ended September 30, 1999 was
$(580,000),  reflecting a decrease of $45,000 from the net loss  experienced for
the six months ended  September  30, 1998.  The decline in net loss is primarily
due to equity in losses from limited  partnerships  which declined by $36,000 to
$(454,000) for the six months ended  September 30, 1999 from  $(490,000) for the
tsix  months  ended  September  30,  1998.  This  decrease  was a result  of the
Partnership  not recognizing  certain losses of the Local Limited  Partnerships.
The investments in such Local Limited  Partnerships  had reached $0 at September
30, 1999. 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 from limited  partnerships  there was a decrease in
loss from  operations  of $9,000 for the six months ended  September 30, 1999 to
$(126,000),  from $(135,000) for the six months ended September 30, 1998, due to
a comparable increase in operating expense allocations.

Cash Flows

Six Months Ended  September 30, 1999 Compared to Six Months Ended  September 30,
1998.  Net cash used in during  the six  months  ended  September  30,  1999 was
$(3,000)  compared to a net decrease in cash for the six months ended  September
30, 1998 of  $(8,000).  The change was due  primarily to a decrease in operating
costs of $4,000 offset by an increase in distributions from limited partnerships
of $1,000.

During the six months ended September 30, 1999 and 1998, accrued payables, which
consist  primarily of related party  management fees due to the General Partner,
increased by $91,000 and  $93,000,  respectively.  The General  Partner does not
anticipate  that  these  accrued  fees will be paid  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, 1999, to be sufficient to meet all currently foreseeable
future cash requirements.

                                       12

<PAGE>
Impact of Year 2000

WNC & Associates, Inc.

Status of Readiness

Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its general partner. IT systems include computer hardware and software used
to produce  financial  reports and tax return  information.  This information is
then used to generate  reports to investors and regulatory  agencies,  including
the Internal Revenue Service and the Securities and Exchange Commission.  The IT
systems of WNC are year 2000 compliant.

Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems  include  machinery and  equipment  such as  telephones,  voice mail and
electronic  postage  equipment.  Except  for one  telephone  system,  the non-IT
systems of WNC are year 2000  compliant.  The one telephone  system will require
the replacement of one computer and one software application, both of which will
be completed on or before December 15, 1999.

Service  Providers.  WNC also  relies on the IT and  non-IT  systems  of service
providers. Service providers include utility companies,  financial institutions,
telecommunications carriers,  municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider,  financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant.  There can be no assurance that this
compliance  information  is  correct.  There also can be no  assurance  that the
systems of other,  less-important  service providers and outside vendors will be
year 2000 compliant.

Costs to Address Year 2000 Issues

The cost to address  year 2000  issues for WNC has been less than  $20,000.  The
cost to replace the telephone  system noted above will be less than $5,000.  The
cost to deal with potential year 2000 issues of other outside  vendors cannot be
estimated at this time.

Risk of Year 2000 Issues

The most  reasonable and likely result from non-year 2000  compliance of systems
of the service  providers  noted above will be the disruption of normal business
operations for WNC. This disruption would, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely  be  temporary  and  would  likely  not  have a  material  effect  on the
Partnership or WNC.

Local Limited Partnerships

Status of Readiness

WNC is in the  process of  obtaining  year 2000  certifications  from each Local
General Partner of each Local Limited  Partnership.  Those  certifications  will
represent  to the  Partnership  that the IT and non-IT  systems  critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT  systems of property  management  companies,  independent
accountants,    electrical   power   providers,   financial   institutions   and
telecommunications  carriers used by the Local Limited Partnership are year 2000
compliant.

There can be no assurance that the representations in the certifications will be
correct.   There  also  can  be  no   assurance   that  the  systems  of  other,
less-important  service  providers  and  outside  vendors,  upon which the Local
Limited Partnerships rely, will be year 2000 compliant.

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<PAGE>
Costs to Address Year 2000 Issues

There  will be no cost to the  Partnership  as a result of  assessing  year 2000
issues for the Local Limited Partnerships.  The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.

Risk of Year 2000 Issues

There may be Local  General  Partners who indicate  that they or their  property
management  company are not year 2000  compliant and do not have plans to become
year 2000  compliant  before the end of 1999.  There may be other Local  General
Partners who are  unwilling to respond to the  certification  request.  The most
likely result of either non-compliance or failure to respond will be the removal
and  replacement  of the property  management  company  and/or the Local General
Partner with year 2000 compliant operators.

Despite the efforts to obtain certifications, there can be no assurance that the
Partnership  will be unaffected  by year 2000 issues.  The most  reasonable  and
likely  result from non-year 2000  compliance  will be the  disruption of normal
business  operations  for the  Local  Limited  Partnerships,  including  but not
limited  to the  possible  failure  to  properly  collect  rents and meet  their
obligations in a timely manner.  This disruption  would, in turn, lead to delays
by  the  Local  Limited  Partnerships  in  performing  reporting  and  fiduciary
responsibilities  on behalf of the  Partnership.  The worst-case  scenario would
include the  initiation of  foreclosure  proceedings on the property by mortgage
debt holders. Under these circumstances, WNC or its affiliates will take actions
necessary  to  minimize  the risk of  foreclosure,  including  the  removal  and
replacement of a Local General  Partner by the  Partnership.  These delays would
likely  be  temporary  and  would  likely  not  have a  material  effect  on the
Partnership or WNC.

Item 3.  Quantitative and Qualitative Disclosures About Market Risks

         NONE

Part II. Other Information

Item 1.  Legal Proceedings

         NONE

Item 6.  Exhibits and Reports on Form 8-K

         NONE

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<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/ John B. Lester, Jr.

John B. Lester, Jr., President
WNC & Associates, Inc.

Date: November 17, 1999



By:  /s/ Michael L. Dickenson

Michael L. Dickenson, Vice-President - Chief Financial Officer
WNC & Associates, Inc.

Date: November 17, 1999



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