UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)

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

For the quarterly period ended                          December 31, 2007
                                       ---------------------------------------

                             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 01-18462

                Boston Financial Qualified Housing Tax Credits L.P. III
------------------------------------------------------------------------------
                  (Exact name of registrant as specified in its charter)


                   Delaware                               04-3032106
------------------------------------------------------------------------------
      (State or other jurisdiction of      (I.R.S. Employer Identification No.)
       incorporation or organization)


   101 Arch Street, Boston, Massachusetts                 02110-1106
--------------------------------------------   -----------------------------
    (Address of principal executive offices)             (Zip Code)


Registrant's telephone number, including area code       (617) 439-3911
                                                 ----------------------------

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 .


Indicate by check mark whether the registrant is a shell company (a defined in
Rule 12b-2 of the Exchange Act)
                                  Yes No X .


<PAGE>










<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)









                                TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION                                         Page No.
------------------------------                                         --------

Item 1.    Financial Statements

           Balance Sheet (Unaudited) - December 31, 2007                    1

           Statements of Operations (Unaudited) - For the Three and Nine
            Months Ended December 31, 2007 and 2006                         2

           Statement of Changes in Partners' Equity (Unaudited) -
             For the Nine Months Ended December 31, 2007                    3

            Statements of Cash Flows (Unaudited) - For the Nine
             Months Ended December 31, 2007 and 2006                        4

           Notes to the Financial Statements (Unaudited)                    5

Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations                            7

Item 3A (T).  Controls and Procedures                                       13

PART II - OTHER INFORMATION

Items 1-6                                                                   14

SIGNATURE                                                                   15

CERTIFICATIONS                                                              16


<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)


                                  BALANCE SHEET
                                December 31, 2007
                                   (Unaudited)




<TABLE>
<CAPTION>
<S>                                                                                             <C>

         Assets

Cash and cash equivalents                                                                         $     1,483,016
Investments in Local Limited Partnerships (Note 1)                                                        395,949
                                                                                                  ---------------
   Total Assets                                                                                   $     1,878,965
                                                                                                  ===============

Liabilities and Partners' Equity

Due to affiliate                                                                                  $        80,208
Accrued expenses                                                                                           65,649
                                                                                                  ---------------
   Total Liabilities                                                                                      145,857

General, Initial and Investor Limited Partners' Equity                                                  1,733,108
                                                                                                  ---------------
   Total Liabilities and Partners' Equity                                                         $     1,878,965
                                                                                                  ===============

</TABLE>


    The accompanying notes are an integral part of these financial statements.

<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                                STATEMENTS OF OPERATIONS
            For the Three and Nine Months Ended December 31, 2007 and 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
<S>                                            <C>               <C>                      <C>               <C>

                                                                  Three Months Ended             Nine Months Ended
                                                  December 31,        December 31,        December 31,        December 31,
                                                      2007                2006                2007                2006
                                                ----------------   ----------------     ---------------     ----------
Revenue
   Investment                                   $         32,528    $        109,078    $       439,951     $       388,052
   Other                                                       -               2,756                895               2,756
                                                ----------------    ----------------    ---------------     ---------------
       Total Revenue                                      32,528             111,834            440,846             390,808
                                                ----------------    ----------------    ---------------     ---------------

Expenses:
   Asset management fees, affiliate                       15,201              27,541             45,603              82,623
   Provision for valuation allowance on
     investments in Local Limited
     Partnerships (Note 1)                               585,476                   -            585,476                   -
   General and administrative
     (includes reimbursement to an
     affiliate in the amount of
    $45,887 and $58,803 for the nine months
     ended December 31, 2007 and 2006,
     respectively)                                        54,677              47,664            176,149              35,936
   Amortization                                              539                 539              1,618               1,618
                                                ----------------    ----------------    ---------------     ---------------
       Total Expenses                                    655,893              75,744            808,846             120,177
                                                ----------------    ----------------    ---------------     ---------------

Income (Loss) before equity in losses of
   Local Limited Partnerships and gain
   on disposal of investments in
   Local Limited Partnerships                           (623,365)             36,090           (368,000)            270,631

Equity in losses of Local Limited
   Partnerships (Note 1)                                 (24,427)            (39,597)          (175,566)           (144,108)

Gain on disposal of investments in
   Local Limited Partnerships                                  -                   -                  -           2,046,454
                                                ----------------    ----------------    ---------------     ---------------

Net Income (Loss)                               $       (647,792)   $         (3,507)   $      (543,566)    $     2,172,977
                                                ================    ================    ===============     ===============

Net Income (Loss) allocated:
   General Partners                             $         (6,478)   $            (35)   $        (5,436)    $        21,730
   Limited Partners                                     (641,314)             (3,472)          (538,130)          2,151,247
                                                ----------------    ----------------    ---------------     ---------------
                                                $       (647,792)   $         (3,507)   $      (543,566)    $     2,172,977
                                                ================    ================    ===============     ===============

Net Income (Loss) Per Limited Partner
   Unit (100,000 Units)                         $         (6.41)    $         (0.04)    $        (5.38)     $         21.51
                                                ===============     ===============     ==============      ===============
</TABLE>

    The accompanying notes are an integral part of these financial statements.





<PAGE>

                  BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                   STATEMENT OF CHANGES IN PARTNERS' EQUITY
                     For the Nine Months Ended December 31, 2007
                                   (Unaudited)




<TABLE>
<CAPTION>
<S>                                           <C>              <C>                 <C>                <C>


                                                                     Initial           Investor
                                                  General            Limited            Limited
                                                 Partners           Partners           Partners             Total

Balance at March 31, 2007                      $     120,449     $        5,000     $   11,923,553     $   12,049,002

Cash distributions                                   (97,747)                 -         (9,674,581)        (9,772,328)

Net Loss                                              (5,436)                 -           (538,130)          (543,566)
                                               -------------     --------------     --------------      --------------

Balance at December 31, 2007                   $      17,266     $        5,000     $    1,710,842     $    1,733,108
                                               =============     ==============     ==============     ==============
</TABLE>
    The accompanying notes are an integral part of these financial statements.

<PAGE>

                 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                           STATEMENTS OF CASH FLOWS
              For the Nine Months Ended December 31, 2007 and 2006
                                   (Unaudited)


<TABLE>
<CAPTION>
<S>                                                                          <C>                 <C>


                                                                                  2007                 2006
                                                                              -------------       ---------

Net cash provided by (used for) operating activities                          $     286,105       $    (156,505)

Net cash provided by investing activities                                                 -           2,772,127

Net cash used for financing activities                                           (9,772,328)                  -
                                                                               -------------      -------------

Net increase (decrease) in cash and cash equivalents                             (9,486,223)          2,615,622

Cash and cash equivalents, beginning                                             10,969,239           8,394,272
                                                                               -------------      -------------

Cash and cash equivalents, ending                                             $   1,483,016       $  11,009,894
                                                                               =============      =============
</TABLE>


    The accompanying notes are an integral part of these financial statements.



<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America. These statements should be read in
conjunction with the financial statements and notes thereto included with the
Partnership's Form 10-KSB for the year ended March 31, 2007. In the opinion of
the Managing General Partner, these financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the Partnership's financial position and results of operations.
The results of operations for the period may not be indicative of the results to
be expected for the year.

The Managing General Partner of the Partnership has elected to report results of
the Local Limited Partnerships in which the Partnership has a limited
partnership interest on a 90-day lag basis because the Local Limited
Partnerships report their results on a calendar year basis. Accordingly, the
financial information of the Local Limited Partnerships that is included in the
accompanying financial statements is as of September 30, 2007 and 2006.

Generally, profits, losses, tax credits and cash flow from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners, after certain priority payments. The
General Partners may have an obligation to fund deficits in their capital
accounts, subject to limits set forth in the Partnership Agreement. However, to
the extent that the General Partners' capital accounts are in a deficit
position, certain items of net income may be allocated to the General Partners
in accordance with the Partnership Agreement.

1.   Investments in Local Limited Partnerships

The Partnership currently owns limited partnership interests in seven Local
Limited Partnerships which were organized for the purpose of owning and
operating multi-family housing complexes, all of which are government-assisted.
The Partnership's ownership interest in each Local Limited Partnership is 99%.
The Partnership may have negotiated or may negotiate options with the Local
General Partners to purchase or sell the Partnership's interests in the Local
Limited Partnerships at the end of the Compliance Period at nominal prices. In
the event that Properties are sold to third parties, or upon dissolution of the
Local Limited Partnerships, proceeds will be distributed according to the terms
of each Local Limited Partnership agreement.
<TABLE>
<CAPTION>
<S>                                                                                               <C>

The following is a summary of investments in Local Limited Partnerships at
December 31, 2007:

Capital contributions paid to Local Limited Partnerships and purchase
   price paid to withdrawing partners of Local Limited Partnerships                                 $    12,290,092

Cumulative equity in losses of Local Limited Partnerships(excluding cumulative
   unrecognized losses of $55,281,518)                                                                   (8,977,361)

Cumulative cash distributions received from Local Limited Partnerships                                   (1,174,471)
                                                                                                    ---------------

Investments in Local Limited Partnerships before adjustments                                              2,138,260

Excess investment costs over the underlying assets acquired:

   Acquisition fees and expenses                                                                            638,496

   Cumulative amortization of acquisition fees and expenses                                                (211,620)
                                                                                                     ---------------

Investments in Local Limited Partnerships before valuation allowance                                      2,565,136

Valuation allowance on investment in Local Limited Partnerships                                          (2,169,187)
                                                                                                    - --------------

Investments in Local Limited Partnerships                                                           $       395,949
                                                                                                     ===============

</TABLE>
<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                   NOTES TO THE FINANCIAL STATEMENTS (continued)
                                   (Unaudited)


1. Investments in Local Limited Partnerships (continued)

The Partnership has recorded a valuation allowance for its investments in
certain Local Limited Partnerships in order to appropriately reflect the
estimated net realizable value of these investments.

The Partnership's share of the net losses of the Local Limited Partnerships for
the nine months ended December 31, 2007 is $1,865,163. For the nine months ended
December 31, 2007, the Partnership has not recognized $1,689,597 of equity in
losses relating to certain Local Limited Partnerships in which cumulative equity
in losses and distributions exceeded its total investments in these Local
Limited Partnerships.

2.   Significant Subsidiaries

The following Local Limited Partnerships invested in by the Partnership
represent more than 20% of the Partnership's total assets or equity as of
December 31, 2007 or 2006 or net losses for the three months ended either
December 31, 2007 or 2006. The following financial information represents the
performance of these Local Limited Partnerships for the three months ended
September 30, 2007 and 2006:
<TABLE>
<CAPTION>
<S>                                                                             <C>                      <C>

Riverfront Apartments, L.P.                                                          2007                     2006
---------------------------                                                     ---------------           --------

Revenue                                                                         $       449,877           $     429,355
Net Loss                                                                        $       (24,673)          $     (39,997)

Westgate Apartments, L.P.

Revenue                                                                         $        26,403           $      25,727
Net Loss                                                                        $        (1,560)          $      (4,678)

</TABLE>


<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The use of
words like "anticipate," "estimate," "intend," "project," "plan," "expect,"
"believe," "could," and similar expressions are intended to identify such
forward-looking statements. The Partnership intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements and is including this statement for purposes of complying with these
safe harbor provisions. Although the Partnership believes the forward-looking
statements are based on reasonable assumptions and current expectations, the
Partnership can give no assurance that its expectations will be attained. Actual
results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, general economic and real estate
conditions and interest rates.

Critical Accounting Policies

The Partnership's accounting policies include those that relate to its
recognition of investments in Local Limited Partnerships using the equity method
of accounting. The Partnership's policy is as follows:

The Local Limited Partnerships in which the Partnership invests are Variable
Interest Entities ("VIE"s). The Partnership is involved with the VIEs as a
non-controlling limited partner equity holder. Because the Partnership is not
the primary beneficiary of these VIEs, it accounts for its investments in the
Local Limited Partnerships using the equity method of accounting. As a result of
its involvement with the VIEs, the Partnership's exposure to economic and
financial statement losses is limited to its investments in the VIEs ($395,949
at December 31, 2007). The Partnership may be subject to additional losses to
the extent of any financial support that the Partnership voluntarily provides in
the future. Under the equity method, the investment is carried at cost, adjusted
for the Partnership's share of net income or loss and for cash distributions
from the Local Limited Partnerships; equity in income or loss of the Local
Limited Partnerships is included currently in the Partnership's operations.
Under the equity method, a Local Limited Partnership investment will not be
carried below zero. To the extent that equity in losses are incurred when the
Partnership's carrying value of the respective Local Limited Partnership has
been reduced to a zero balance, the losses will be suspended and offset against
future income. Income from Local Limited Partnerships, where cumulative equity
in losses plus cumulative distributions have exceeded the total investment in
Local Limited Partnerships, will not be recorded until all of the related
unrecorded losses have been offset. To the extent that a Local Limited
Partnership with a carrying value of zero distributes cash to the Partnership,
that distribution is recorded as income on the books of the Partnership and is
included in "other revenue" in the accompanying financial statements.

The Partnership has implemented policies and practices for assessing
other-than-temporary declines in values of its investments in Local Limited
Partnerships. Periodically, the carrying values of the investments are compared
to their respective fair values. If an other-than-temporary decline in carrying
value exists, a provision to reduce the asset to fair value, as calculated based
primarily on remaining tax benefits, will be recorded in the Partnership's
financial statements. Generally, the carrying value of most Local Limited
Partnerships will decline through losses and distributions in amounts sufficient
to prevent other-than-temporary impairments. However, the Partnership may record
similar impairment losses in the future if the expiration of tax credits
outpaces losses and distributions from any of the Local Limited Partnerships.

Liquidity and Capital Resources

At December 31, 2007, the Partnership has cash and cash equivalents of
$1,483,016, as compared with $10,969,239 at March 31, 2007. This decrease is
primarily attributable to distributions of $9,772,328 made to the General and
Limited Partners during the current quarter.


<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Liquidity and Capital Resources (continued)

The Managing General Partner initially designated 3.00% of the Gross Proceeds as
Reserves as defined in the Partnership Agreement. The Reserves were established
to be used for working capital of the Partnership and contingencies related to
the ownership of Local Limited Partnership interests. The Managing General
Partner may increase or decrease such Reserves from time to time, as it deems
appropriate. During the year ended March 31, 1993, the Managing General Partner
increased the Reserve level to 3.75%. At December 31, 2007, $1,483,016 has been
designated as Reserves.

To date, professional fees relating to various Property issues totaling
approximately $2,379,000 have been paid from Reserves. To date, Reserve funds in
the amount of approximately $534,000 also have been used to make additional
capital contributions to four Local Limited Partnerships, and the Partnership
has paid approximately $452,000 (net of paydowns) to purchase the mortgage of
The Kyle Hotel. In the event a Local Limited Partnership encounters operating
difficulties requiring additional funds, the Managing General Partner might deem
it in its best interest to voluntarily provide such funds in order to protect
its investment. As of December 31, 2007, the Partnership has advanced
approximately $1,578,000 to Local Limited Partnerships to fund operating
deficits.

The Managing General Partner believes that the investment income earned on the
Reserves, along with cash distributions received from Local Limited
Partnerships, to the extent available, will be sufficient to fund the
Partnership's ongoing operations. Reserves may be used to fund Partnership
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover the Partnership's operations, the
Partnership will seek other financing sources including, but not limited to, the
deferral of Asset Management Fees paid to an affiliate of the Managing General
Partner or working with Local Limited Partnerships to increase cash
distributions. To date, the Partnership has used approximately $2,676,000 of
operating funds and proceeds from sales of investments in Local Limited
Partnerships to replenish Reserves.

Since the Partnership invests as a limited partner, the Partnership has no
contractual duty to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, as of December 31, 2007, the Partnership
had no contractual or other obligation to any Local Limited Partnership which
had not been paid or provided for.

Cash Distributions

The Partnership is currently working on disposing of its interest in certain
Local Limited Partnerships during the next twelve months. These dispositions may
result in cash available for distribution, but due to the uncertainty of the
sales, no guarantees can be made as to the extent of their outcome on
distributions to Limited Partners. Based on the results of 2006 Property
operations, the Local Limited Partnerships are not expected to distribute
significant amounts of cash to the Partnership because such amounts will be
needed to fund Property operating costs. In addition, many of the Properties
benefit from some type of federal or state subsidy and, as a consequence, are
subject to restrictions on cash distributions.

In October 2007, the Partnership distributed $9,772,328, or $96.77 per Unit,
representing a distribution from the proceeds of previously reported
dispositions of sixty-three Properties and/or the Partnership's investment in
the Local Limited Partnerships owning these Properties. The Managing General
Partner anticipates making additional distributions in the future.



<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Results of Operations

Three Month Period

For the three months ended December 31, 2007, the Partnership's operations
resulted in net loss of $647,792 as compared to net loss of $3,507 for the same
period in 2006. The increase in net loss is primarily due to an increase in
provision for valuation allowance on investments in Local Limited Partnerships
and a decrease in investment revenue. The increase in provision for valuation
allowance on investments in Local Limited Partnerships is due to the Partnership
recording an impairment allowance for its investment in one Local Limited
Partnership. The decrease in investment revenue during the period ended December
31, 2007 resulted from a decrease in the average balance of funds held for
investment.

Nine Month Period

For the nine months ended December 31, 2007, the Partnership's operations
resulted in net loss of $543,566 as compared to net income of $2,172,977 for the
same period in 2006. The decrease in net income is primarily due to a gain on
sale of investments in Local Limited Partnerships recognized in the 2006 period,
an increase in general and administrative expenses and an increase in provision
for valuation of investments in Local Limited Partnerships. The decrease in gain
on sale of investment in Local Limited Partnerships is due to the disposal of
four Local Limited Partnerships with large proceeds during the nine months ended
December 31, 2006, where as no Local Limited Partnerships were disposed of
during the current period. The increase in general and administrative expenses
is primarily due to a reversal of an accrual for monitoring fees in the prior
period. The increase in provision for valuation allowance on investments is due
to the Partnership recording an impairment allowance for its investments in one
Local Limited Partnership in the current period.

Portfolio Update

The Partnership was formed on August 9, 1988 under the laws of the State of
Delaware for the primary purpose of investing, as a limited partner, in Local
Limited Partnerships, which own and operate apartment complexes, most of which
benefit from some form of federal, state or local assistance program and each of
which qualify for low-income housing tax credits. The Partnership's objectives
are to: (i) provide current tax benefits in the form of tax credits which
qualified investors may use to offset their federal income tax liability; (ii)
preserve and protect the Partnership's capital; (iii) provide limited cash
distributions which are not expected to constitute taxable income during
Partnership operations; and (iv) provide cash distributions from sale or
refinancing transactions. The General Partners of the Partnership are Arch
Street III, Inc., which serves as the Managing General Partner, and Arch Street
III L.P., which also serves as the Initial Limited Partner. Both of the General
Partners are affiliates of MMA Financial, Inc. ("MMA"). The fiscal year of the
Partnership ends on March 31.

As of December 31, 2007, the Partnership's investment portfolio consisted of
limited partnership interests in seven Local Limited Partnerships, each of which
owns and operates a multi-family apartment complex and each of which has
generated Tax Credits. Since inception, the Partnership generated Tax Credits,
net of recapture, of approximately $1,342 per Limited Partner Unit. The
aggregate amount of Tax Credits generated by the Partnership was consistent with
the objective specified in the Partnership's prospectus.

In October 2007, the Partnership distributed $9,772,328, or $96.77 per Unit,
representing a distribution from the proceeds of previously reported
dispositions of sixty-three Properties and/or the Partnership's investment in
the Local Limited Partnerships owning these Properties. The Managing General
Partner anticipates making additional distributions in the future.


<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Portfolio Update (continued)

Properties that receive low income housing Tax Credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 calendar years
from the date the Property is placed in service. Failure to do so would result
in recapture of a portion of the Property's Tax Credits. The Compliance Period
of the seven Properties in which the Partnership has an interest expired by
December 31, 2004. The Managing General Partner has negotiated agreements that
will ultimately allow the Partnership to dispose of its interest in three Local
Limited Partnerships. The Partnership did not dispose of any Local Limited
Partnership interests during the nine months ended December 31, 2007.

The Managing General Partner will continue to pursue the disposition of the
Partnership's remaining Local Limited Partnership interests. The Partnership
shall dissolve and its affairs shall be wound up upon the disposition of the
final Local Limited Partnership interest and other assets of the Partnership.
Investors will continue to be Limited Partners, receiving K-1s and quarterly and
annual reports, until the Partnership is dissolved.

The Partnership is not a party to any pending legal or administrative
proceeding, and to the best of its knowledge, no legal or administrative
proceeding is threatened or contemplated against it.

Property Discussions

Five Properties in which the Partnership has an interest have stabilized
operations and operated above break-even as of September 30, 2007. Two
Properties generate cash flow deficits that the Local General Partner funds
through project expense loans, subordinated loans or operating escrows. However,
some Properties have had persistent operating difficulties that could either:
(i) have an adverse impact on the Partnership's liquidity; (ii) result in their
foreclosure; or (iii) result in the Managing General Partner deeming it
appropriate for the Partnership to dispose of its interest in the Local Limited
Partnership. Also, the Managing General Partner, in the normal course of the
Partnership's business, may arrange for the future disposition of its interest
in certain Local Limited Partnerships. The following Property discussions focus
only on such Properties.

As previously reported, Elmwood Delmar, located in Aurora, Colorado, has a first
mortgage with a prohibition of prepayment prior to December 2008. Given this
major impediment to sale and the Partnership's desire to transfer its interest
in the Local Limited Partnership since the Property's Compliance Period ended on
December 31, 2003, the Managing General Partner entered into a put option
agreement with an unaffiliated entity that would allow for the transfer of the
Partnership's interest in the Local Limited Partnership to the unaffiliated
entity for a nominal amount. On September 15, 2005, the Partnership effectively
disposed of its interest in Elmwood Delmar when the fund received $2,083 in
exchange for the sale of a Contingent Note that was created in conjunction with
the put option entered into with the unaffiliated third party. Based on the
operating performance of the Property, the Managing General Partner determined
that there was very little value above debt in the Property. The Managing
General Partner, in accordance with and as permitted by the Partnership
Agreement, retained the entire amount of net proceeds from this transfer in
Reserves. HUD's June 6, 2006 approval to a Transfer of Physical Assets
application completed the transfer of the Partnership's interest in this Local
Limited Partnership to the third party. This transfer of Partnership interest
resulted in 2006 taxable income of $829,245, or $8.29 per Unit. The Partnership
no longer has an interest in this Local Limited Partnership.

As previously reported, the Managing General Partner had reached an agreement
with the Local General Partner of West Dade and West Dade II, located in Miami,
Florida, to sell the Partnership's interests in both Local Limited Partnerships,
pending HUD's approval to a Modified Transfer of Physical Assets application.
Upon further review, HUD's approval was not required. In June 2006, the
Partnership received $1,502,777, or $15 per Unit, in exchange


<PAGE>
               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Property Discussions (continued)

for the Partnership's interest in these Local Limited Partnerships. The proceeds
from this transfer have been retained in Reserves in accordance with and as
permitted by the Partnership Agreement. These transfer of interests resulted in
2006 taxable income of $3,040,190, or $30.40 per Unit. The Partnership no longer
has an interest in these Local Limited Partnerships.

As previously reported, increased competition for Georgetown II, located in
Georgetown, Delaware, negatively impacted the Property's operations. Although
the Property maintained a high level of occupancy, the Property's chronic below
breakeven status was attributable to stagnant rental rates and high maintenance
expenses. In 2003, the non-profit affiliate of the state housing finance agency
that holds the Property's long-term ground lease offered to transfer the land at
little cost to the Partnership. The Managing General Partner gave its consent to
the transfer and, in order to reduce potential risk to the Partnership and
provide an exit strategy, concurrently executed a put agreement for the
Partnership's interest in the Local Limited Partnership with the Local General
Partner. The Partnership executed its put option on August 18, 2006, effectively
transferring its interest to the Local General Partner for $5,000. This transfer
resulted in a 2006 taxable loss of $1,340,871, or $13.41 per Unit. The
Compliance Period expired on December 31, 2004. The Partnership no longer has an
interest in this Local Limited Partnership.

As previously reported, Waterfront and Shoreline, both located in Buffalo, New
York, continue to have operating deficits as a result of a soft rental market,
low occupancy and deferred maintenance, which impacts the marketability of the
developments. The mortgage loans on both Properties are payable only out of
available cash flow and neither Property has made mortgage payments in several
years. The Managing General Partner and the Local General Partner commenced
discussions regarding the options available to improve operations at, or dispose
of, the Properties. An agreement was reached whereby the Managing General
Partner would allow the Local General Partner to transfer its Local General
Partner interest to a developer that will re-syndicate the Properties. In
return, the Partnership obtained both a put option allowing the Partnership to
transfer its interest in the Local Limited Partnerships for a nominal sum and a
pledge by the incoming Local General Partner to pay any Tax Credit recapture
incurred due to the transfer of the Local Limited Partnerships prior to the end
of the Compliance Period. These transfers of the Local General Partner interests
occurred during April 2005. The transfer of the Partnership's interests are
currently expected to occur in the fiscal years ending March 31, 2008 and 2009
for Shoreline and Waterfront, respectively. The Managing General Partner does
not expect these transactions to result in net sales proceeds to the
Partnership. These transactions are expected to result in taxable income
projected to be approximately $44,000,000, or $440 per Unit.

As previously reported, the Managing General Partner and Local General Partner
of Wood Creek, located in Calcium, New York, were exploring an exit strategy
that might have resulted in the 2007 disposal of the Partnership's interest in
the Local Limited Partnership. The Managing General Partner is now estimating an
early 2008 disposal, as the Local General Partner began marketing the Property
for sale in October of 2007. In accordance with the terms of the listing
agreement, the Managing General Partner estimates this transaction will result
in net proceeds to the Partnership of approximately $700,000, or $7.00, per
Unit. The Managing General Partner estimates that a sale, under the proposed
terms, will result in 2008 taxable income projected to be approximately
$750,000, or $7.50 per Unit.

As previously reported, with respect to the Partnership, a Settlement Agreement
providing options, subject to various conditions, to purchase the Partnership's
interests in River Front Apartments, L.P., located in Sunbury, PA, and
Susquehanna View, L.P., located in Camp Hill, PA, for an aggregate price of
$1,500,000, were not exercised. The Managing General Partner will explore
alternative exit strategies for these Local Limited Partnership interests.

In accordance with the terms of their respective Partnership Agreements, the
Managing General Partner, effective November 28, 2007, transferred the
Partnership's interest in the Local Limited Partnerships that owned River Front
Apartments, L.P., located in Sunbury, PA, and Susquehanna View, L.P., located in
Camp Hill, PA. The interests in

<PAGE>

                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)


Property Discussions (continued)

the aforementioned Partnerships were transferred to MMA River Front, L.P., and
MMA Susquehanna View, L.P. (together, the "Transferee Partnerships"). Boston
Financial Qualified Housing Tax Credits L.P. III ("QH III") is the sole Limited
Partner of each of the Transferee Partnerships. An affiliate of QH III is the
general partner of each of the Transferee Partnerships and has obtained a 1%
interest in each of the Transferee Partnerships in exchange for a promissory
note in favor of QH III.

In processing these transactions, the Managing General Partner acted out of
necessity, due to the impending expiration of the Partnership's ability to
transfer its interest in the above-mentioned Local Limited Partnerships without
the Local General Partner's consent. As previously disclosed, these Local
Limited Partnership Interests were originally expected to be sold as part of a
settlement agreement between QH III, QH IV, QH V, QH VII, and certain of their
affiliates on the one hand, and on the other hand, Everest Housing Investors 2,
LP, certain of its affiliates, Park GP, Inc., Bond Purchase, L.L.C, Anise,
L.L.C., and Paco Development, L.L.C. (together, the "Everest and Park Parties").
When the Everest and Park Parties failed to exercise their option to purchase
these Local Limited Partnership Interests, the above-described transfers were
carried out. The Managing General Partner may now have flexibility in being able
to dispose of the Partnership's interest in the Local Limited Partnerships
without the Local General Partners' consent, expediting the Managing General
Partner's ability to liquidate the assets of, and dissolve, the Partnership. It
is possible that such Local General Partner may contest this right to free
transferability.

As previously reported, the Managing General Partner planned to exercise the
Partnership's put option and transfer its interest in the Local Limited
Partnership that owns and operates Fourche Valley, located in Perryville,
Arkansas, in January 2008. This transaction, expected to result in net proceeds
of $5,000, or $.05 per Unit to the Partnership, is now expected to occur in
February, 2008. The Managing General Partner estimates this transaction will
result in 2008 taxable income projected to be approximately $225,000, or $2.25
per Unit. The Partnership will cease to have an interest in this Local Limited
Partnership upon receipt of the specified proceeds.

The Managing General Partner anticipates that the Fund's interest in the Local
Limited Partnership that owns Walker Woods, located in Dover, Delaware, will be
terminated upon the sale of the Property in 2008. This sale is expected to
result in net proceeds to the Partnership of approximately $300,000, or $3.00
per Unit. This sale would result in 2008 taxable income projected to be
approximately $777,000, or $7.77 per Unit.



<PAGE>

              BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                          CONTROLS AND PROCEDURES




Item 3A(T).  Controls and Procedures.

As of the end of the period covered by this report, with the participation of
the Partnership's management, the Partnership's principal executive officer and
principal financial officer conducted an evaluation of the Partnership's
disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) under the Exchange Act). Based on this evaluation, our principal
executive officer and principal financial officer concluded that our disclosure
controls and procedures were effective as of December 31, 2007, to provide
reasonable assurance that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.

Changes in Internal Control over Financial Reporting.

During the fiscal quarter ended December 31, 2007, there has been no change in
our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.

<PAGE>


              BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)




PART II       OTHER INFORMATION

Items 1-5     Not applicable

Item 6        Exhibits

              Exhibits

31.1     Certification of Principal Executive Officer and Principal Financial
         Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1     Certification of Principal Executive Officer and Principal Financial
         Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




<PAGE>

             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. III
                             (A Limited Partnership)

                                    SIGNATURE




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.


DATED: February 14, 2008                BOSTON FINANCIAL QUALIFIED HOUSING TAX
                                        CREDITS L.P. III

                                       By:  Arch Street III, Inc.,
                                       its Managing General Partner



                                     /s/Gary Mentesana
                                        Gary Mentesana
                                        President
                                        Arch Street III, Inc.


<PAGE>


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