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 June 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                                                           33-053101
(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__.




<PAGE>


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

                               INDEX TO FORM 10-Q

                       For the Quarter Ended June 30, 2002



PART I. FINANCIAL INFORMATION

         Item 1. Financial Statements

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

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

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

         Statements of Cash Flows
                       For the three months ended June 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..14

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

PART II. OTHER INFORMATION

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

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

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

         Certification Pursuant To 18 U.S.C. Section 1350.....................16


                                       2
<PAGE>


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

                                 BALANCE SHEETS
<TABLE>
<CAPTION>



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

Cash and cash equivalents                                     $                395,671            $            413,336
Investments in limited partnerships, net (Note 2)                            6,303,351                       6,455,167
                                                                -----------------------             -------------------

                                                              $              6,699,022            $          6,868,503
                                                                =======================             ===================


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
 Accrued fees and expenses due to
  General Partner and affiliates (Note 3)                     $              1,018,933            $            994,710

Commitments and contingencies

Partners' equity (deficit):
  General partner                                                             (113,330)                       (111,393)
  Limited partners (30,000 units authorized;
     18,000 units issued and outstanding)                                    5,793,419                       5,985,186
                                                                -----------------------             -------------------

        Total partners' equity                                               5,680,089                       5,873,793
                                                                -----------------------             -------------------

                                                              $              6,699,022            $          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 Months Ended June 30, 2002 and 2001
                                   (unaudited)
<TABLE>
<CAPTION>

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

<S>                                  <C>                                         <C>
Interest income                      $                               1,753       $                             3,663
                                       ------------------------------------        ----------------------------------

Operating expenses:
  Amortization (Note 2)                                             15,116                                    14,718
  Asset management fees (Note 3)                                    45,346                                    45,346
  Legal and accounting                                               5,180                                         -
  Other                                                              3,232                                       800
                                       ------------------------------------        ----------------------------------

    Total operating expenses                                        68,874                                    60,864
                                       ------------------------------------        ----------------------------------

Loss from operations                                               (67,121)                                  (57,201)
                                       ------------------------------------        ----------------------------------

Equity in losses of
 limited partnerships (Note 2)                                    (126,583)                                 (187,401)
                                       ------------------------------------        ----------------------------------

Net loss                             $                            (193,704)       $                         (244,602)
                                       ====================================        ==================================

Net loss allocated to:
  General partner                    $                              (1,937)       $                           (2,446)
                                       ====================================        ==================================

  Limited partners                   $                            (191,767)       $                         (242,156)
                                       ====================================        ==================================

Net loss per limited
 partner unit                        $                                 (11)       $                              (13)
                                       ====================================        ==================================

Outstanding weighted limited
 partner units                                                      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 Three Months Ended June 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                                                         (1,937)            (191,767)            (193,704)
                                                        -----------------      ----------------     ----------------


Partners' equity (deficit) at June 30, 2002           $        (113,330)     $     5,793,419      $     5,680,089
                                                        =================      ================     ================
</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 Three Months Ended June 30, 2002 and 2001
                                   (unaudited)
<TABLE>
<CAPTION>


                                                                              2002                      2001
                                                                        ------------------        ------------------
<S>                                                                   <C>                        <C>
Cash flows from operating activities:
  Net loss                                                            $          (193,704)       $         (244,602)
     Adjustments to reconcile net loss to
       cash used in operating activities:
       Amortization                                                                15,116                    14,718
       Equity in losses of limited partnerships                                   126,583                   187,401
        Change in accrued fees and expenses due to
               General Partner and affiliates                                      24,223                    32,846
                                                                        ------------------        ------------------

Net cash used in operating activities                                             (27,782)                   (9,637)
                                                                        ------------------        ------------------

Cash flows from investing activities:
    Distributions from limited partnerships                                        10,117                    12,898
                                                                        ------------------        ------------------

Net cash provided by investing activities                                          10,117                    12,898
                                                                        ------------------        ------------------

Net increase (decrease) in cash and cash equivalents                              (17,665)                    3,216
                                                                        ------------------        ------------------

Cash and cash equivalents, beginning of period                                    413,336                   437,863
                                                                        ------------------        ------------------
Cash and cash equivalents, end of period                              $           395,671       $           441,124
                                                                        ==================        ==================

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 June 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 months
ended June 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 June 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 June 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 June 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.

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 June 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 Three                For the Year
                                                                         Months Ended                   Ended
                                                                        June 30, 2002               March 31, 2002
                                                                      -------------------         -------------------

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

  Distributions received                                                        (10,117)                    (17,048)
  Equity in losses of limited partnerships                                     (126,583)                   (798,807)
  Amortization of paid acquisition fees and costs                               (15,116)                    (58,868)
                                                                      -------------------         -------------------

  Investments per balance sheet, end of period                      $         6,303,351         $         6,455,167
                                                                      ===================         ===================
</TABLE>

Selected financial information for the three months ended June 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                                           $              785,000     $            760,000
                                                      ----------------------     --------------------
  Expenses:
     Operating expenses                                            507,000                  473,000
     Interest expense                                              214,000                  216,000
     Depreciation and amortization                                 283,000                  288,000
                                                      ----------------------     --------------------

  Total expenses                                                 1,004,000                  977,000
                                                      ----------------------     --------------------

  Net loss                                          $             (219,000)    $           (217,000)
                                                      ======================     ====================

  Net loss allocable to the Partnership             $             (217,000)    $           (216,000)
                                                      ======================     ====================

  Net loss recorded by the Partnership              $            ( 127,000)    $           (187,000)
                                                      ======================     ====================
</TABLE>


                                       10
<PAGE>



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

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                       For the Quarter Ended June 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 $45,346 were
     incurred  during each of the three months ended June 30, 2002 and 2001. The
     Partnership  paid the General  Partner or its  affiliates  $25,000 of those
     fees during the three  months  ended June 30,  2002 and $12,500  during the
     three months ended June 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  June 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>

                                                                     June 30, 2002              March 31, 2002
                                                                 ----------------------      ----------------------

<S>                                                           <C>                         <C>
Reimbursement for expenses paid by the General
   Partners and affiliates                                    $                  5,538    $                  1,661
Asset management fee payable                                                 1,013,395                     993,049
                                                                 ----------------------      ----------------------
                                                              $              1,018,933    $                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>



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
three  months  ended June 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 June 30, 2002  consisted  primarily of $396,000 in
cash and aggregate  investments  in the eighteen Local Limited  Partnerships  of
$6,303,000.  Liabilities at June 30, 2002  primarily  consisted of $1,013,000 of
accrued asset management fees due to the General Partner.

Results of Operations

Three Months  Ended June 30, 2002  Compared to Three Months Ended June 30, 2001.
The  Partnership's  net loss  for the  three  months  ended  June  30,  2002 was
$(194,000), reflecting a decrease of $51,000 from the $(245,000) of net loss for
the three months ended June 30, 2001.  The decline in net loss is primarily  due
to a  decrease  in equity  in  losses of  limited  partnerships  of  $60,000  to
$(127,000)  for the three  months  ended June 30, 2002 from  $(187,000)  for the
three months  ended June 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 June 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 offset
by an increase in loss from  operations  of $10,000 for the three  months  ended
June 30, 2002 to $(67,000)  from  $(57,000)  for the three months ended June 30,
2001, due to a reduction of interest income and an increase in legal, accounting
and other operating expenses.

Cash Flows

Three months  Ended June 30, 2002  Compared to Three months Ended June 30, 2001.
Net cash used during the three months ended June 30, 2002 was $(18,000) compared
to net cash  provided for the three  months  ended June 30, 2001 of $3,000.  The
change of $21,000 was primarily due to an increase in operating  costs of $8,000
a decrease in interest  income of $2,000 and a decrease  in  distributions  from
limited partnerships of $3,000.

                                       12
<PAGE>

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

During the three  months  ended June 30, 2002 accrued  payables,  which  consist
primarily  of  asset  management  fees to the  General  Partner  or  affiliates,
increased by $24,000. 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 June 30, 2002,  to be  sufficient  to meet all  currently  foreseeable
future cash requirements.


                                       13
<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risks

          NONE

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

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


Part II. Other Information

Item 1.  Legal Proceedings

          NONE

Item 6.  Exhibits and Reports on Form 8-K

          NONE

                                       14

<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
Chief Operating Officer of WNC & Associates, Inc.

Date:  July 31, 2002





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

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

Date:  July 31, 2002


                                       15
<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly  Report on Form 10-Q of WNC California  Housing
Tax Credits III, L.P. (the  "Partnership") for the period ended June 30, 2002 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  and  pursuant to 18 U.S.C.,  section  1350,  as adopted  pursuant to
section  906 of the  Sarbanes-Oxley  Act of 2002,  I,  Wilfred N.  Cooper,  Sr.,
Chairman and Chief Executive Officer of WNC & Associates,  Inc., general partner
[of the general partner] of the Partnership, hereby certify that:

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

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


/s/WILFRED N. COOPER, SR.
-------------------------
Wilfred N. Cooper, Sr.
Chairman and Chief Executive Officer of WNC & Associates, Inc.
July 31, 2002




                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly  Report on Form 10-Q of WNC California  Housing
Tax Credits III, L.P. (the  "Partnership") for the period ended June 30, 2002 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  and  pursuant to 18 U.S.C.,  section  1350,  as adopted  pursuant to
section  906 of the  Sarbanes-Oxley  Act of  2002,  I,  Thomas  J.  Riha,  Chief
Financial  Officer of WNC & Associates,  Inc.,  general  partner [of the general
partner] of the Partnership, hereby certify that:

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

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


/s/THOMAS J. RIHA
Thomas J. Riha
Chief Financial Officer of WNC & Associates, Inc.
July 31, 2002

                                       16