FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark One)

        x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    For the fiscal year ended March 31, 2002

                                       OR

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

             For the transition period from __________ to __________

                         Commission file number: 0-23908


                  WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.

California                                                           33-0563307
(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

           Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

           Securities registered pursuant to section 12(g) of the Act:

                      UNITS OF LIMITED PARTNERSHIP INTEREST

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes____    No __X

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x
                                       1
<PAGE>


State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.

                                  INAPPLICABLE


                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K  (e.g.,  Part I, Part II,  etc.)  into  which the  document  is
incorporated:  (1) Any annual  reFport  to  security  holders;  (2) Any proxy or
information  statement;  and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the  Securities Act of 1933.  The listed  documents  should be clearly
described for identification  purposes (e.g.,  annual report to security holders
for fiscal year ended December 24, 1980).

                                      NONE



                                       2
<PAGE>


PART I.

Item 1.  Business

Organization

WNC California  Housing Tax Credits III, L.P. ("CHTC III" or the  "Partnership")
is a  California  limited  partnership  formed  under  the laws of the  State of
California on October 5, 1992.  The  Partnership  was formed to acquire  limited
partnership  interests  in  other  limited  partnerships  or  limited  liability
companies ("Local Limited Partnerships") which own multifamily housing complexes
that are  eligible  for  low-income  housing  federal  and,  in  certain  cases,
California income tax credits ("Low Income Housing Credits").

The general partner of the Partnership is WNC Tax Credit Partners III, L.P. (the
"General  Partner"  or  "TCP  III").  The  general  partner  of TCP III is WNC &
Associates,  Inc.  ("Associates").  Wilfred N. Cooper,  Sr.,  through the Cooper
Revocable Trust, owns 93.65% of the outstanding stock of Associates.  Wilfred N.
Cooper,  Jr.,  President of Associates,  owns 3.01% of the outstanding  stock of
Associates.  The  business of the  Partnership  is conducted  primarily  through
Associates, as TCP III and the Partnership have no employees of their own.

Pursuant to a  registration  statement  filed with the  Securities  and Exchange
Commission, on February 17, 1993, the Partnership commenced a public offering of
30,000 Units of Limited Partnership  Interest ("Units") at a price of $1,000 per
Unit.  As of the close of the offering on July 22, 1994, a total of 18,000 Units
representing  $18,000,000 had been sold. Holders of Units are referred to herein
as "Limited Partners."

Description of Business

The  Partnership's  principal  business  objective  is to  provide  its  Limited
Partners with Low Income Housing Credits.  The Partnership's  principal business
therefore  consists of investing as a limited partner or non-managing  member in
Local  Limited  Partnerships  each of which will own and operate a  multi-family
housing  complex (the "Housing  Complex")  which will qualify for the Low Income
Housing Credit.  In general,  under Section 42 of the Internal  Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce  Federal  taxes  otherwise due in each year of a ten-year  period.  In
general,  under Section 17058 of the  California  Revenue and Taxation  Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against  California taxes otherwise due in each year of a four-year period.  The
Housing Complex is subject to a fifteen-year  compliance period (the "Compliance
Period"),  and under state law may have to be maintained  as low income  housing
for 30 or more years.

In general,  in order to avoid  recapture  of Low Income  Housing  Credits,  the
Partnership  does not  expect  that it will  dispose of its  interests  in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited  Partnership of its Housing Complex prior to the end of the
applicable  Compliance  Period.  Because  of  (i)  the  nature  of  the  Housing
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or more years in the  future,  and (iii) the  ability of  government
lenders to  disapprove  of transfer,  it is not possible at this time to predict
whether the liquidation of the  Partnership's  assets and the disposition of the
proceeds,  if any, in  accordance  with the  Partnership's  Agreement of Limited
Partnership,  as amended by Supplement No. 1 thru  Supplement No. 9 thereto (the
"Partnership Agreement"), will be able to be accomplished promptly at the end of
the 15-year period. If a Local Limited Partnership is unable to sell its Housing
Complex,  it is  anticipated  that the local  general  partner  ("Local  General
Partner")  will either  continue to operate  such  Housing  Complex or take such
other actions as the Local General  Partner  believes to be in the best interest
of the Local Limited Partnership.  Notwithstanding the preceding,  circumstances
beyond the  control of the General  Partner or the Local  General  Partners  may
occur during the  Compliance  Period,  which would  require the  Partnership  to
approve the disposition of a Housing Complex prior to the end thereof,  possibly
resulting in recapture of Low Income Housing Credits.

                                       3
<PAGE>


As of March 31, 2002,  the  Partnership  had invested in eighteen  Local Limited
Partnerships.  Each of these Local Limited  Partnerships  owns a Housing Complex
that is eligible  for the federal  Low Income  Housing  Credit and eight of them
were  eligible for the  California  Low Income  Housing  Credit.  Certain  Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.

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 General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are 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 or non-managing  member 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  general  partners  or  managing  members  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  Partnership  management
decisions are made by the General Partner.

As a limited partner or non-managing  member,  the  Partnership's  liability for
obligations of each Local Limited Partnership is limited to its investment.  The
Local General Partners of each Local Limited  Partnership retain  responsibility
for developing,  constructing,  maintaining,  operating and managing the Housing
Complexes.

Item 2.  Properties

Through its investments in Local Limited  Partnerships,  the  Partnership  holds
limited  partnership  interests in the Housing  Complexes.  The following  table
reflects  the status of the eighteen  Housing  Complexes as of the dates and for
the periods indicated:


                                       4
<PAGE>

<TABLE>
<CAPTION>
                                                                                -------------------------   ------------------------
                                                                                  As of March 31, 2002       As of December 31, 2001
                                                                                -------------------------   ------------------------
                                                           Partnership's
                                                              Total                                        Estimated    Encumbrances
                                                           Investment Amount of                            Low Income       of Local
 Partnership Name      Location    General Partner Name    Partnership's Paid to Date  Of Units   Occupancy  Credits    Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>            <C>                  <C>           <C>                <C>    <C>     <C>           <C>
Almond Garden          Delhi,         Anthony Donovan
Apartment Associates   California                          $  391,000    $  391,000         34      88%    $  807,000    $ 1,381,000

Almond View            Stockton       Daniel C. Logue and
Apartments,Ltd.        California     Cyrus Youssefi         1,639,000    1,639,000         72      100%    3,523,000      1,754,000

Buccaneer              Fernandia      Clifford E.
Associates,Limited     Beach,Florida  Olsen                   365,000       365,000         48       94%      768,000      1,468,000

Candleridge
Apartments of          Perry          Eric A.
Perry L.P. II          Iowa           Sheldahl                126,000       126,000         24      100%      245,000        695,000


                                      S.P. Thomas
                                      Company of
Colonial                              Northern California
Village                Roseville      Inc. and Project Go,
Roseville              Calfornia      Inc.                  2,811,000     2,811,000         56      100%    5,872,000      2,044,000


                                      Thomas H. Cooksey
                                      and Apartment
Dallas County          Orrville,      Developers,
Housing, Ltd.          Alabama        Inc.                    130,000       130,000         19      100%      287,000        612,000

La Paloma del Sol      Deming, New    Dean
Limited Partnership    Mexico         Greenwalt               254,000       254,000         38       95%      625,000      1,424,000

Memory Lane Limited    Yankton        Skogen - Peterson,
Partnership            South Dakota   Inc.                    151,000       151,000         18       95%      295,000        680,000

                                      Self-Help Enterprises,
Nueva Sierra Vista     Richgrove      Inc. and Nueva Sierra
Associates             California     Vista Corporation     1,688,000     1,688,000         35       92%    3,516,000      1,629,000

</TABLE>

                                       5
<PAGE>


<TABLE>
<CAPTION>
                                                                                -------------------------   ------------------------
                                                                                  As of March 31, 2002       As of December 31, 2001
                                                                                -------------------------   ------------------------
                                                           Partnership's
                                                              Total                                        Estimated    Encumbrances
                                                           Investment Amount of                            Low Income      of  Local
                                                           Local Limited Investment      Number              Housing         Limited
 Partnership Name      Location    General Partner Name    Partnership's Paid to Date  Of Units   Occupancy  Credits    Partnerships
------------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>                       <C>           <C>              <C>      <C>      <C>          <C>
Old Fort Limited       Hidalgo     Alan Deke Noftsker and
Partnership            Texas       ABO Corporation            249,000       249,000         40       93%      547,000      1,270,000

Orosi Apartments       Orosi       Douglas W.
Ltd.                   California  Young                      461,000       461,000         42       98%      902,000      1,929,000

                                   David J. Micheal and
Parlier                Parlier     Proffesional Apartment
Garden Apts.           California  Management, Inc.           453,000       453,000         41      100%      917,000      1,699,000

Rosewood Apartments    Superior    Duffy Development
Limited Partnership    Wisconsin   Company, Inc.              185,000       185,000         20       95%      375,000        482,000

Sun Manor              Itta Bena   Glenn D.
L.P.                   Mississippi Miller                     230,000       230,000         36       97%      464,000      1,051,000

                                   David J. Michael, Bucky
                       South Lake  Fong, Dean Pearson, Coy
Tahoe Pines            Tahoe       Elvis and Dr. Patricia
Apartments             California  Hatton                   1,633,000     1,633,000         28       93%    3,171,000      1,668,000

Venus Retirement       Venus       W. Joseph
Village,Ltd.           Texas       Chamy                      161,000       161,000         24      100%      318,000        721,000

Walnut                 Orange      Walnut
Pixley, L.P.           California  Pixley, Inc.             1,078,000     1,078,000         22      100%    2,309,000      1,693,000

Winters Investment     Winters,    John P.
Group                  California  Casper                     531,000       531,000         38      100%    1,072,000      1,824,000
                                                              --------      --------       ----     ----   ----------      ---------

                                                          $12,536,000  $ 12,536,000        635       97% $ 26,013,000    $24,024,000
                                                          ============ =============       ===       === =============   ===========
</TABLE>


                                       6
<PAGE>



<TABLE>
                                          --------------------------------------------------------------------------
                                                            For the year ended December 31, 2001
                                          --------------------------------------------------------------------------
                                                                                                   Low Income
                                                                                                Housing Credits
                                                                                                  Allocated to
             Partnership Name                 Rental Income             Net Loss                  Partnership
 -------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                   <C>                                <C>
 Almond Garden Apartment Associates                    $ 162,000             $ (50,000)                         99%

 Almond View Apartments, Ltd.                            209,000              (230,000)                         99%

 Buccaneer Associates, Limited                           222,000               (46,000)                         99%

 Candleridge Apartments of Perry L.P. II                 151,000               (11,000)                         99%

 Colonial Village Roseville                              450,000               (49,000)                         99%

 Dallas County Housing, Ltd.                              68,000               (17,000)                         99%

 La Paloma del Sol Limited Partnership                   129,000               (38,000)                         99%

 Memory Lane Limited Partnership                          72,000               (20,000)                         99%

 Nueva Sierra Vista Associates                           142,000              (101,000)                         99%

 Old Fort Limited Partnership                            151,000               (40,000)                         99%

 Orosi Apartments, Ltd.                                  193,000               (16,000)                         99%

 Parlier Garden Apts.                                    202,000               (21,000)                         95%

 Rosewood Apartments Limited Partnership                  80,000                (4,000)                         99%

 Sun Manor, L.P.                                         143,000               (26,000)                         99%

 Tahoe Pines Apartments                                  182,000              (118,000)                         99%

 Venus Retirement Village, Ltd.                           87,000               (18,000)                         99%

 Walnut - Pixley, L.P.                                   150,000               (42,000)                         99%

 Winters Investment Group                                197,000               (29,000)                         99%
                                                        ---------              -------                      --------
                                                     $ 2,990,000            $ (876,000)
                                                     ===========            ===========
</TABLE>

                                       7
<PAGE>




Item 3.  Legal Proceedings

NONE.

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

NONE

PART II.

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Item 5a.

(a)  The  Units  are not  traded on a public  exchange  but were sold  through a
     public offering.  It is not anticipated that any public market will develop
     for the  purchase  and  sale of any  Unit and  none  exists.  Units  can be
     assigned  only if certain  requirements  in the  Partnership  Agreement are
     satisfied.

(b)  At March 31, 2002, there were 973 Limited Partners.

(c)  The Partnership was not designed to provide cash  distributions  to Limited
     Partners in  circumstances  other than  refinancing  or  disposition of its
     investments in Local Limited Partnerships.

(d)  No unregistered  securities  were sold by the  Partnership  during the year
     ended March 31, 2002.

Item 5b.

NOT APPLICABLE

Item 6.  Selected Financial Data

Selected balance sheet information for the Partnership is as follows:
<TABLE>
<CAPTION>
                                                         March 31                               December 31
                                     --------------------------------------------------   -----------------------
                                        2002         2001         2000         1999         1998          1997
                                     -----------  -----------   ----------   ----------   ----------   -----------
<S>                                <C>          <C>           <C>          <C>          <C>          <C>
ASSETS
Cash and cash equivalents          $    413,336 $    437,863  $   480,598  $   509,695  $   561,751  $  1,451,071
Investments in limited
  partnerships, net                   6,455,167    7,329,890    8,224,971    9,164,197    9,415,032    10,400,720
Other assets                                  -            -            -            -            -         2,242
                                     -----------  -----------   ----------   ----------   ----------   ------------

                                   $  6,868,503 $  7,767,753  $ 8,705,569  $ 9,673,892  $ 9,976,783    11,854,033
                                     ===========  ===========   ==========   ==========   ==========   ===========
LIABILITIES
Due to limited partnerships        $          - $          -  $         -  $    16,836  $    16,836  $     16,836
Due to general partner and
  affiliates                            994,710      849,164      718,279      552,257      561,391       370,223
Due to limited partners                       -            -            -            -            -       900,000
                                     -----------  -----------   ----------   ----------   ----------   -----------

                                        994,710      849,164      718,279      569,093      578,227     1,287,059
                                     -----------  -----------   ----------   ----------   ----------   -----------

PARTNERS' EQUITY                      5,873,793    6,918,589    7,987,290    9,104,799    9,398,556    10,566,974
                                     -----------  -----------   ----------   ----------   ----------   -----------

                                   $  6,868,503 $  7,767,753  $ 8,705,569  $ 9,673,892  $ 9,976,783  $ 11,854,033
                                     ===========  ===========   ==========   ==========   ==========   ===========

</TABLE>

                                       8
<PAGE>


Selected results of operations, cash flows and other information for the
Partnership are as follows:
<TABLE>
<CAPTION>
                                                                              For the
                                    For the Years Ended                 Three Months Ended        For the Years Ended
                                          March 31                           March 31                  December 31
                            ---------------------------------------    ------------------------   -------------------------
                              2002          2001           2000         1999          1998          1998          1997
                           -----------   -----------     ---------    ----------    ----------   -----------   -----------
                                                                                    Unaudited

<S>                      <C>            <C>           <C>           <C>           <C>          <C>            <C>
Loss from operations     $   (245,989)  $  (246,997)  $  (244,656)  $   (64,061)  $  (54,043)  $   (249,631)  $   (205,576)
Equity in losses of
  limited partnerships       (798,807)     (821,704)     (872,853)     (229,696)    (244,537)      (918,787)    (1,028,617)
                           -----------   -----------     ---------    ----------    ----------   -----------   -----------

Net loss                 $ (1,044,796)  $(1,068,701)  $ (1,117,50)  $  (293,757)  $ (298,580)  $ (1,168,418)  $ (1,234,193)
                           ===========   ===========     =========    ==========    ==========   ===========   ===========

Net loss allocated to:
  General partner        $    (10,448)  $   (10,687)  $   (11,175)  $    (2,938)  $   (2,986)  $    (11,684)  $    (12,342)
                           ===========    ===========     =========    ==========    ==========   ===========   ===========


  Limited partners       $ (1,034,348)  $(1,058,014)  $ (1,106,33)  $  (290,819)  $ (295,594)  $ (1,156,734)  $ (1,221,851)
                           ===========   ===========     =========    ==========    ==========   ===========   ===========

Net loss per limited
  partner unit           $     (57.46)  $    (58.78)  $    (61.46)   $  (16.16)    $  (16.42)  $     (64.26)  $     (67.88)
                           ===========   ===========     =========    ==========    ==========    ==========   ===========
 Outstanding weighted          18,000        18,000        18,000       18,000        18,000         18,000         18,000
  limited partner units    ===========   ===========     =========    ==========    ==========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>


                                                                            For the
                                    For the Years                      Three Months Ended          For the Years Ended
                                         March 31                            March 31                  December 31
                           --------------------------------------     ------------------------   -------------------------
                              2002          2001           2000         1999          1998          1998          1997
                           -----------   -----------    ---------     ----------    ----------   -----------   -----------
                                                                                                                Unaudited
<S>                      <C>          <C>             <C>            <C>           <C>            <C>          <C>
Net cash provided by
  (used in):
  Operating activities   $    (41,575) $    (55,648)  $   (18,170)   $    (58,079) $     9,678  $      4,243 $      (6,960)
  Investing activities         17,048        12,913       (10,927)         6,023         3,200         6,437       (40,005)
  Financing activities              -             -             -              -      (900,000)     (900,000)            -
                           -----------   -----------    ---------     ----------    ----------   -----------   -----------
Net decrease in cash
  and cash equivalents        (24,527)      (42,735)      (29,097)       (52,056)     (887,122)     (889,320)      (46,965)

Cash and cash
  equivalents,
  beginning of period         437,863       480,598       509,695        561,751     1,451,071     1,451,071     1,498,036
                           -----------   -----------    ---------     ----------    ----------   -----------   -----------
Cash and cash
  equivalents, end of
  period                 $    413,336  $    437,863   $   480,598    $   509,695   $   563,949  $    561,751 $   1,451,071
                           ===========   ===========    =========     ==========    ==========   ===========   ===========
</TABLE>

Low Income Housing Credit per Unit was as follows for the years ended December
31:
<TABLE>
<CAPTION>

                                     2001            2000             1999             1998             1997
                                 -------------   --------------   -------------    -------------    -------------
<S>                            <C>             <C>              <C>              <C>              <C>
Federal                        $          113  $           113  $          113   $          113   $          113
State                                       -                -               -               17               66
                                 -------------   --------------   -------------    -------------    -------------
Total                          $          113  $           113  $          113   $          130   $          179
                                 =============   ==============   =============    =============    =============
</TABLE>

                                       9

<PAGE>


Item 7. 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-K 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-K and in other reports we filed with the
Securities and Exchange  Commission.  The following discussion should be read in
conjunction  with  the  Financial  Statements  and the  Notes  thereto  included
elsewhere in this filing.

Financial Condition

The  Partnership's  assets at March 31, 2002  consisted  of $413,000 in cash and
aggregate  investments in the eighteen Local Limited Partnerships of $6,455,000.
Liabilities at March 31, 2002 primarily  consisted of $995,000 of accrued annual
management fees due to the General Partner.

Results of Operations

Year  Ended  March  31,  2002  Compared  to  Year  Ended  March  31,  2001.  The
Partnership's  net loss for the year  ended  March  31,  2002 was  $(1,045,000),
reflecting a decrease of $24,000 from the net loss of  $(1,069,000)  experienced
for the year ended March 31, 2001.  The decrease in net loss is primarily due to
equity in losses of limited partnerships which declined by $23,000 to $(799,000)
for the year ended march 31, 2002 from  $(822,000)  for the year ended March 31,
2001.  This decrease was a result of the  Partnership  not  recognizing  certain
losses of the Local Limited Partnerships.  The investments in such Local Limited
Partnerships had reached $0 at March 31, 2002. Since the Partnership's liability
with respect to its  investments is limited,  losses in excess of investment are
not recognized.

Year  Ended  March  31,  2001  Compared  to  Year  Ended  March  31,  2000.  The
Partnership's  net loss for the year  ended  March  31,  2001 was  $(1,069,000),
reflecting a decrease of $49,000 from the net loss of  $(1,118,000)  experienced
for the year ended March 31, 2000.  The decrease in net loss is primarily due to
equity  in losses  from  limited  partnerships  which  declined  by  $51,000  to
$(822,000) for the year ended March 31, 2000 from  $(873,000) for the year ended
March 31, 2000.  This decrease was a result of the  Partnership  not recognizing
certain losses of the Local Limited Partnerships.  The investments in such Local
Limited  Partnerships had reached $0 at March 31, 2000. Since the  Partnership's
liability  with  respect  to its  investments  is  limited,  losses in excess of
investment are not recognized.

Cash Flows

Year Ended March 31, 2002  Compared to Year Ended March 31, 2001.  Net cash used
during the year ended  March 31, 2002 was  $(25,000),  compared to net cash used
for the year ended March 31, 2001 of $(43,000).  The change was due primarily to
a decrease in the amount of cash paid to the General Partner for management fees
compared with the amount paid in the prior year.

                                       10
<PAGE>


Year Ended March 31, 2001  Compared to Year Ended March 31, 2000.  Net cash used
during the year ended  March 31, 2001 was  $(43,000),  compared to net cash used
for the year ended March 31, 2000 of $(29,000).  The change was due primarily to
an  increase in the amount of cash paid to the  General  Partner for  management
fees compared with the amount paid in the prior year.

During the years ended March 31, 2002, 2001 and 2000,  accrued  payables,  which
consist  primarily of related party  management fees due to the General Partner,
increased by $146,000, $131,000 and $166,000,  respectively. 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 March 31, 2002, to be  sufficient  to meet all  currently  foreseeable
future cash requirements.

Impact of 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.  We have
not yet  completed  our  evaluation  of the impact of SFAS 144 on our  financial
position or results of operations.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

NOT APPLICABLE

Item 8.  Financial Statements and Supplementary Data

                                       11
<PAGE>



               Report of Independent Certified Public Accountants



To the Partners
WNC California Housing Tax Credits III, L.P.


We have audited the  accompanying  balance sheets of WNC California  Housing Tax
Credits III, L.P. (a California Limited  Partnership) (the  "Partnership") as of
March 31, 2002 and 2001,  and the related  statements of  operations,  partners'
equity  (deficit)  and cash flows for the years ended March 31,  2002,  2001 and
2000. These financial  statements are the  responsibility  of the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements  based  on  our  audits.  A  significant  portion  of  the  financial
statements of the limited  partnerships  in which the  Partnership  is a limited
partner was audited by other  auditors  whose reports have been furnished to us.
As discussed in Note 2 to the financial statements, the Partnership accounts for
its investments in limited  partnerships using the equity method. The portion of
the Partnership's  investments in limited partnerships audited by other auditors
represented  76% of the total  assets of the  Partnership  at March 31, 2002 and
2001.  Our  opinion,  insofar  as it  relates  to the  amounts  included  in the
financial  statements for the limited partnerships which were audited by others,
is based solely on the reports of the other auditors.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain  reasonable  assurance  about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  We believe that our audits and the reports of
other auditors provide a reasonable basis for our opinion.

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of WNC  California  Housing Tax  Credits  III,  L.P. (a
California  Limited  Partnership) as of March 31, 2002 and 2001, and the results
of its  operations  and its cash flows for the years ended March 31, 2002,  2001
and 2000, in conformity with  accounting  principles  generally  accepted in the
United States of America.

                                          /s/  BDO SEIDMAN, LLP

Orange County, California
April 26, 2002

                                       12
<PAGE>


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

                                 BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                                  March 31
                                                                        ------------------------------
                                                                            2002             2001
                                                                        -------------    -------------
<S>                                                                   <C>              <C>
 ASSETS

 Cash and cash equivalents                                            $      413,336   $      437,863
 Investments in limited partnerships, net
   (Notes 2 and 3)                                                         6,455,167        7,329,890
                                                                        -------------    -------------

                                                                      $    6,868,503   $    7,767,753
                                                                        =============    =============

 LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

 Liabilities:
    Accrued fees and expenses due to General Partner
       and affiliates (Note 3)                                        $      994,710   $      849,164
                                                                        -------------    -------------

 Commitments and contingencies

 Partners' equity (deficit):
    General partner                                                         (111,393)        (100,945)
    Limited partners (30,000 units authorized; 18,000 units
       issued and outstanding)                                             5,985,186        7,019,534
                                                                        -------------    -------------

          Total partners' equity                                           5,873,793        6,918,589
                                                                        -------------    -------------

                                                                      $    6,868,503   $    7,767,753
                                                                        =============    =============
</TABLE>

                 See accompanying notes to financial statements
                                       13
<PAGE>


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

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                     For the Years Ended
                                                                           March 31
                                                      ---------------------------------------------------
                                                          2002              2001               2000
                                                      --------------    -------------      --------------

<S>                                                 <C>               <C>                <C>
Interest income                                     $        11,282   $       19,599     $        19,937
Other income                                                 11,444                -                   -
                                                      --------------    -------------      --------------

   Total income                                              22,726           19,599              19,937
                                                      --------------    -------------      --------------

Operating expenses:
   Amortization (Note 2)                                     58,868           60,464              60,464
   Asset management fees (Note 3)                           181,385          181,571             181,385
   Other                                                     28,462           24,561              22,744
                                                      --------------    -------------      --------------

    Total operating expenses                                268,715          266,596             264,593
                                                      --------------    -------------      --------------

Loss from operations                                       (245,989)        (246,997)           (244,656)

Equity in losses of limited
  partnerships (Note 2)                                    (798,807)        (821,704)           (872,853)
                                                      --------------    -------------      --------------

Net loss                                            $    (1,044,796)  $   (1,068,701)   $     (1,117,509)
                                                      ==============    =============      ==============

Net loss allocated to:
   General partner                                  $       (10,448)  $      (10,687)   $        (11,175)
                                                      ==============    =============      ==============

   Limited partners                                 $    (1,034,348)  $   (1,058,014)   $     (1,106,334)
                                                      ==============    =============      ==============

Net loss per limited partner unit                   $        (57.46)  $       (58.78)   $         (61.46)
                                                      ==============    =============      ==============

Outstanding weighted limited partner units                   18,000           18,000              18,000
                                                      ==============    =============      ==============
</TABLE>
                 See accompanying notes to financial statements

                                       14
<PAGE>


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

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

                For The Years Ended March 31, 2002, 2001 and 2000
<TABLE>
<CAPTION>

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

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

Net loss                                                           (11,175)       (1,106,334)         (1,117,509)
                                                            ---------------    ---------------     ---------------

Partners' (deficit) equity at March 31, 2000                       (90,258)        8,077,548           7,987,290

Net loss                                                           (10,687)       (1,058,014)         (1,068,701)
                                                            ---------------    ---------------     ---------------

Partners' (deficit) equity at March 31, 2001                      (100,945)        7,019,534           6,918,589

Net loss                                                           (10,448)       (1,034,348)         (1,044,796)
                                                            ---------------    ---------------     ---------------

Partners' (deficit) equity at March 31, 2002              $       (111,393)  $     5,985,186    $      5,873,793
                                                            ===============    ===============     ===============
</TABLE>
                 See accompanying notes to financial statements
                                       15

<PAGE>


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

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                                For the Years Ended
                                                                                       March 31
                                                                     ----------------------------------------------
                                                                        2002            2001             2000
                                                                     -----------    -------------    --------------

<S>                                                                <C>          <C>              <C>
Cash flows from operating activities:
   Net loss                                                        $ (1,044,796)  $   (1,068,701)$      (1,117,509)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
     Amortization                                                        58,868           60,464            60,464
     Equity in losses of limited
       partnerships                                                     798,807          821,704           872,853
     Change in accrued fees and
       expenses due to General
       Partner and affiliates                                           145,546          130,885           166,022
                                                                     -----------    -------------    --------------

Net cash used in
  operating activities                                                  (41,575)         (55,648)          (18,170)
                                                                     -----------    -------------    --------------

Cash flows from investing activities:
   Investments in limited partnerships, net                                   -                -           (16,836)
   Distributions from limited
     partnerships                                                        17,048           12,913             5,909
                                                                     -----------    -------------    --------------

Net cash provided by (used in)
  investing activities                                                   17,048           12,913           (10,927)
                                                                     -----------    -------------    --------------

Net decrease in cash and cash
  equivalents                                                           (24,527)         (42,735)          (29,097)

Cash and cash equivalents,
   beginning of year                                                    437,863          480,598           509,695
                                                                     -----------    -------------    --------------

Cash and cash equivalents,
   end of year                                                     $    413,336   $      437,863   $       480,598
                                                                     ===========    =============    ==============

SUPPLEMENTAL DISCLOSURE
  OF CASH FLOW INFORMATION:

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

                 See accompanying notes to financial statements
                                       16
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

                For The Years Ended March 31, 2002, 2001 and 2000





NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
Organization
------------
WNC California  Housing Tax Credits III, L.P. a California  Limited  Partnership
(the  "Partnership"),  was formed on October 5, 1992 under the laws of the state
of California and began  operations on July 19, 1993. The Partnership was formed
to  invest  primarily  in  other  limited   partnerships   (the  "Local  Limited
Partnerships")  which  own  and  operate  multi-family  housing  complexes  (the
"Housing  Complex") that are eligible for low income housing credits.  The local
general   partners  (the  "Local  General   Partners")  of  each  Local  Limited
Partnership retain  responsibility  for maintaining,  operating and managing the
Housing Complex.

The  general  partner  is WNC  Tax  Credit  Partners  III,  L.P.  (the  "General
Partner").  WNC &  Associates,  Inc.  ("WNC") is the general  partner of WNC Tax
Credit Partners III, L.P.  Wilfred N. Cooper Sr.,  through the Cooper  Revocable
Trust owns  93.65% of the  outstanding  stock of WNC.  Wilfred N.  Cooper,  Jr.,
President of WNC, owns 3.01% of the outstanding stock of WNC.

The Partnership shall continue in full force and effect until December 31, 2050
unless terminated prior to that date pursuant to the partnership agreement or
law.

The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.

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

After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 3) 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.

                                       17

<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000



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).

Equity in losses of Local  Limited  Partnerships  for the years  ended March 31,
2002, 2001 and 2000 have been recorded by the  Partnership  based on nine months
of reported  results  provided by the Local  Limited  Partnerships  and on three
months of results  estimated by management of the Partnership.  Equity in losses
of Local Limited Partnerships allocated to the Partnership are not recognized to
the extent that the investment  balance would be adjusted below zero. As soon as
the  investment  balance  reaches  zero  amortization  of the  related  costs of
acquiring the investment is  accelerated to the extent of losses  available (see
Note 2).

                                       18

<PAGE>

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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000





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

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 March 31,  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  partner  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 loss 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
during the years 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.  The
Partnership  has not yet completed  its  evaluation of the impact of SFAS 144 on
its financial position or results of operations.

                                       19
<PAGE>


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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000





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  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 Local Limited Partnerships.

The  Partnership's  investments  in Local Limited  Partnerships  as shown in the
balance  sheets  at March 31,  2002 and 2001 are  approximately  $1,291,000  and
$1,308,000, respectively, greater than the Partnership's equity at the preceding
December  31 as shown in the  Local  Limited  Partnerships'  combined  financial
statements  presented  below.  This  difference  is primarily  due to unrecorded
losses,  as discussed below,  acquisition,  selection and other costs related to
the  acquisition  of  the  investments   which  have  been  capitalized  in  the
Partnership's  investment  account.  The Partnership's  investment is also lower
than  the  Partnership's  equity  as shown in the  Local  Limited  Partnerships'
combined  financial  statements  due to the  estimated  losses  recorded  by the
Partnership for the three month period ended March 31.

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 from the Local Limited Partnerships are accounted for as
a  reduction  of  the  investment  balance.  Distributions  received  after  the
investment has reached zero are recognized as income.

At March 31, 2002 and 2001,  the  investment  accounts in certain  Local Limited
Partnerships  have  reached  a zero  balance.  Consequently,  a  portion  of the
Partnership's  estimate  of its share of losses  for the years  ended  March 31,
2002,  2001 and 2000 amounting to  approximately  $46,080,  $23,838 and $51,893,
respectively,  have not been  recognized.  As of March 31, 2002,  the  aggregate
share of net losses not recognized by the Partnership amounted to $173,670.

Following is a summary of the equity method activity of the investments in Local
Limited Partnerships for periods presented:
<TABLE>
<CAPTION>
                                                                                 For the Years
                                                                                Ended March 31
                                                              ----------------------------------------------------
                                                                   2002               2001              2000
                                                              ---------------    ---------------    --------------

<S>                                                         <C>                <C>                <C>
Investments per balance sheet, beginning of period          $      7,329,890   $      8,224,971   $     9,164,197
Distributions received from limited partnerships                     (17,048)           (12,913)           (5,909)
Equity in losses of limited partnerships                            (798,807)          (821,704)         (872,853)
Amortization of capitalized acquisition fees and costs               (58,868)           (60,464)          (60,464)
                                                              ---------------    ---------------    --------------

Investments per balance sheet, end of period                $      6,455,167   $      7,329,890   $     8,224,971
                                                              ===============    ===============    ==============
</TABLE>


                                       20
<PAGE>




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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000


NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
-------------------------------------------------------
The financial  information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest  subsidies are generally  netted against
interest expense.  Approximate combined condensed financial information from the
individual financial statements of the Local Limited Partnerships as of December
31 and for the years then ended is as follows:

                                        COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                    2001                2000
                                                                               ---------------     ---------------

<S>                                                                          <C>                 <C>
  ASSETS

  Buildings and improvements, net of accumulated depreciation as of
   December 31, 2001 and 2000 of $8,764,000 and $7,676,000, respectively.    $     27,296,000    $     28,334,000
  Land                                                                              2,380,000           2,380,000
  Other assets                                                                      2,371,000           2,214,000
                                                                               ---------------     ---------------

                                                                             $     32,047,000    $     32,928,000
                                                                               ===============     ===============

LIABILITIES

Mortgage and construction loans payable                                      $     24,024,000    $     24,163,000
Due to related parties                                                                735,000             626,000
Other liabilities                                                                   1,222,000           1,164,000
                                                                               ---------------     ---------------

                                                                                   25,981,000          25,953,000
                                                                               ---------------     ---------------

PARTNERS' EQUITY

WNC California Housing Tax Credits III, L.P.                                        5,164,000           6,022,000
Other partners                                                                        902,000             953,000
                                                                               ---------------     ---------------

                                                                                    6,066,000           6,975,000
                                                                               ---------------     ---------------

                                                                             $     32,047,000    $     32,928,000
                                                                               ===============     ===============
</TABLE>
                                       21

<PAGE>






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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000

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

                   COMBINED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                 2001               2000                1999
                                                            ---------------    ---------------     ---------------

<S>                                                       <C>                <C>                 <C>
Revenues                                                  $      3,140,000   $      3,040,000    $      2,986,000
                                                            ---------------    ---------------     ---------------

Expenses:
   Operating expenses                                            2,026,000          1,944,000           1,886,000
   Interest expense                                                857,000            814,000             870,000
   Depreciation and amortization                                 1,133,000          1,153,000           1,169,000
                                                            ---------------    ---------------     ---------------

         Total expenses                                          4,016,000          3,911,000           3,925,000
                                                            ---------------    ---------------     ---------------

Net loss                                                  $       (876,000)$         (871,000)  $        (939,000)
                                                            ===============    ===============     ===============

Net loss allocable to the Partnership                     $       (845,000)$         (862,000)  $        (930,000)
                                                            ===============    ===============     ===============

Net loss recorded by the Partnership                      $       (799,000)$         (822,000)  $        (873,000)
                                                            ===============    ===============     ===============
</TABLE>

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  the  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
-----------------------------------
Under the terms of the  Partnership  Agreement,  the Partnership is obligated to
the General Partner or its affiliates for the following items:

     Acquisition  fees of up to 9% of the gross  proceeds from the sale of Units
     as compensation for services rendered in connection with the acquisition of
     Local  Limited  Partnerships.  At the  end of all  periods  presented,  the
     Partnership   incurred   acquisition   fees  of   $1,620,000.   Accumulated
     amortization  of these  capitalized  costs was  $538,090 and $412,391 as of
     March 31,  2002 and 2001,  respectively.  Of the  accumulated  amortization
     recorded  on the  balance  sheet at March 31,  2001  $33,875 of the related
     expense was  reflected as equity in losses of limited  partnerships  on the
     statement of operations  during the fourth  quarter of the year ended March
     31,  2001 to  reduce  the  respective  net  acquisition  fee  component  of
     investments in local limited  partnerships  to zero for those Local Limited
     Partnerships which would otherwise be below a zero balance. During the year
     ended March 31, 2002, an additional  $72,995 was recognized  under the same
     methodology.

     Reimbursement  of costs incurred by the General  Partner or an affiliate in
     connection  with the  acquisition  of  Local  Limited  Partnerships.  These
     reimbursements have not exceeded 1.5% of the gross proceeds.  As of the end
     of all periods  presented,  the Partnership  incurred  acquisition costs of
     $194,019,  which have been included in investments in limited partnerships.
     Accumulated  amortization  was $52,887 and $42,738 as of March 31, 2002 and
     2001, respectively. Of the accumulated amortization recorded on the balance
     sheet at March 31,  2001,  $8,994 of the related  expense was  reflected as
     equity in losses of limited  partnerships  on the  statement of  operations
     during the fourth  quarter of the year ended  March 31,  2001 to reduce the
     respective net  acquisition  cost component of investments in local limited
     partnerships  to zero for those  Local  Limited  Partnerships  which  would
     otherwise be below a zero balance. During the year ended March 31, 2002, an
     additional $3,985 was recognized under the same methodology.
                                       22

<PAGE>




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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000



NOTE 3 - RELATED PARTY TRANSACTIONS, continued
----------------------------------------------

     An annual  management fee equal to 0.5% of the invested assets of the Local
     Limited  Partnerships,  including the Partnership's  allocable share of the
     mortgages. Management fees of $181,385, $181,571 and $181,385 were incurred
     during the years  ended March 31,  2002,  2001 and 2000,  respectively,  of
     which, $37,500,  $50,000 and $12,500 were paid during the years ended March
     31, 2002, 2001 and 2000, respectively.

     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 December 31, 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 consisted of
the following at:
<TABLE>
<CAPTION>
                                                                            March 31
                                                                 --------------------------------
                                                                     2002              2001
                                                                 --------------    --------------

<S>                                                            <C>               <C>
Reimbursement for expenses paid by the General
   Partner or its affiliate                                    $         1,661   $             -

Accrued asset management fees                                          993,049           849,164
                                                                 --------------    --------------

                                                               $       994,710   $       849,164
                                                                 ==============    ==============
</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 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
----------------------------------------------------
The following is a summary of the quarterly operations for the years ended March
31, 2002 and 2001:
<TABLE>
<CAPTION>

                                           June 30           September 30       December 31           March 31
                                        ---------------     ---------------    ---------------     ---------------

               2002
               ----

<S>                                   <C>                 <C>               <C>                <C>
Income                                $          3,663    $         3,276   $         2,562    $        13,225

Operating expenses                              60,864             77,083            64,323             66,445

Equity in losses of limited
     partnerships                             (187,401)          (222,222)         (186,828)          (202,356)

Net loss                                      (244,602)          (296,029)         (248,589)          (255,576)

Loss available to limited partners            (242,156)          (293,069)         (246,103)          (253,020)

Loss per limited partner unit                      (13)               (16)              (14)               (14)

</TABLE>

                                       23
<PAGE>






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

                    NOTES TO FINANCIAL STATEMENTS -CONTINUED

                For The Years Ended March 31, 2002, 2001 and 2000


NOTE 4 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED), continued
---------------------------------------------------------------
<TABLE>
<CAPTION>

                                           June 30           September 30       December 31           March 31
                                        ---------------     ---------------    ---------------     ---------------

               2001
               ----

<S>                                   <C>                 <C>                <C>                <C>
Income                                $          5,264    $          5,220   $         5,018    $         4,097

Operating expenses                              64,939              71,908            64,907             64,842

Equity in losses of limited
     partnerships                             (218,159)           (218,159)         (218,159)          (167,227)

Net loss                                      (277,834)           (284,847)         (278,048)          (227,972)

Loss available to limited partners            (275,056)           (281,999)         (275,268)          (225,691)

Loss per limited partner unit                      (15)               ( 16)              (15)               (13)
</TABLE>


NOTE 5 - 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.
                                       24


<PAGE>





Item  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure

NOT APPLICABLE

PART III.

Item 10.  Directors and Executive Officers of the Registrant

The Partnership has no directors or executive officers of its own. The following
biographical  information is presented for the directors and executive  officers
of Associates which has principal responsibility for the Partnership's affairs.

Directors and Executive Officers of WNC & Associates, Inc.

The directors of WNC & Associates,  Inc. are Wilfred N. Cooper,  Sr., who serves
as Chairman of the Board,  John B.  Lester,  Jr.,  David N.  Shafer,  Wilfred N.
Cooper, Jr. and Kay L. Cooper.  The principal  shareholders of WNC & Associates,
Inc. is a trust established by Wilfred N. Cooper, Sr.

Wilfred  N.  Cooper,  Sr.,  age 71, is the  founder,  Chief  Executive  Officer,
Chairman,  and a Director of WNC &  Associates,  Inc., a Director of WNC Capital
Corporation,  and a general partner in some of the programs previously sponsored
by the  Sponsor.  Mr.  Cooper has been  involved in real estate  investment  and
acquisition  activities  since 1968.  Previously,  during 1970 and 1971,  he was
founder and principal of Creative Equity Development Corporation,  a predecessor
of WNC & Associates,  Inc., and of Creative  Equity  Corporation,  a real estate
investment firm. For 12 years prior to that, Mr. Cooper was employed by Rockwell
International  Corporation,  last  serving as its  manager of housing  and urban
developments where he had  responsibility  for factory-built  housing evaluation
and project  management  in urban  planning  and  development.  Mr.  Cooper is a
Director of the  National  Association  of Home  Builders  (NAHB) and a National
Trustee  for NAHB's  Political  Action  Committee,  a Director  of the  National
Housing  Conference  (NHC)  and a member  of  NHC's  Executive  Committee  and a
Director of the National Multi-Housing Council (NMHC). Mr. Cooper graduated from
Pomona College in 1956 with a Bachelor of Arts degree.

Wilfred N.  Cooper,  Jr.,  age 39, is  President,  Chief  Operating  Officer,  a
Director and a member of the Acquisition Committee of WNC & Associates,  Inc. He
is President of, and a registered  principal  with, WNC Capital  Corporation,  a
member firm of the NASD, and is a Director of WNC  Management,  Inc. He has been
involved in investment and  acquisition  activities  with respect to real estate
since he joined the  Sponsor  in 1988.  Prior to this,  he served as  Government
Affairs  Assistant with Honda North America in Washington,  D.C. Mr. Cooper is a
member of the Advisory Board for LIHC Monthly Report,  a Director of NMHC and an
Alternate  Director of NAHB. He graduated  from The American  University in 1985
with a Bachelor of Arts degree.

David N.  Shafer,  age 50, is  Executive  Vice  President,  a Director,  General
Counsel,  and a member of the Acquisition  Committee of WNC & Associates,  Inc.,
and a  Director  and  Secretary  of WNC  Management,  Inc.  Mr.  Shafer has been
involved in real estate investment and acquisition  activities since 1984. Prior
to joining the Sponsor in 1990, he was  practicing  law with a specialty in real
estate and taxation.  Mr.  Shafer is a Director and President of the  California
Council of Affordable  Housing and a member of the State Bar of California.  Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts  degree,  from the New  England  School of Law in 1983 with a
Juris  Doctor  degree (cum laude) and from the  University  of San Diego in 1986
with a Master of Law degree in Taxation.


                                       25
<PAGE>


Thomas J. Riha, age 47, became Chief Financial  Officer  effective January 2001.
Prior to his  appointment  as Chief  Financial  Officer he was Vice  President -
Asset Management and a member of the Acquisition  Committee of WNC & Associates,
Inc. and a Director and Chief Executive Officer of WNC Management, Inc. Mr. Riha
has been involved in acquisition and investment  activities with respect to real
estate since 1979.  Prior to joining the Sponsor in 1994,  Mr. Riha was employed
by Trust Realty Advisor, a real estate acquisition and management company,  last
serving as Vice  President - Operations.  Mr. Riha graduated from the California
State  University,  Fullerton in 1977 with a Bachelor of Arts degree (cum laude)
in Business Administration with a concentration in Accounting and is a Certified
Public  Accountant  and a member of the American  Institute of Certified  Public
Accountants.

Sy P. Garban,  age 56, is Vice  President - National  Sales of WNC & Associates,
Inc.  and has been  employed by the  Sponsor  since  1989.  Mr.  Garban has been
involved in real estate  investment  activities since 1978. Prior to joining the
Sponsor he served as  Executive  Vice  President  of MRW,  Inc.,  a real  estate
development  and management  firm.  Mr. Garban is a member of the  International
Association of Financial  Planners.  He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.

Michael J. Gaber,  age 36, is Vice President - Acquisitions  and a member of the
Acquisitions Committee of WNC & Associates,  Inc. Mr. Gaber has been involved in
real estate acquisition,  valuation and investment activities since 1989 and has
been employed with WNC since 1997.  Prior to joining WNC & Associates,  Inc., he
was involved in the valuation and classification of major assets,  restructuring
of debt and analysis of real estate taxes with the H.F. Ahmanson company, parent
to Home  Savings of America.  Mr.  Gaber  graduated  from the  California  State
University,  Fullerton  in 1991 with a Bachelor  of Science  degree in  Business
Administration - Finance.

David Turek, age 47, is Vice President - Originations of WNC & Associates,  Inc.
He has been involved with real estate  investment and finance  activities  since
1976 and has been employed by WNC & Associates,  Inc.  since 1996.  From 1995 to
1996,  Mr. Turek served as a consultant  for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties.  From 1990 to 1995, he was involved in the development of
conventional  and tax credit  multi-family  housing.  He is a Director  with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.

Kay L. Cooper,  age 65, is a Director of WNC & Associates,  Inc. Mrs. Cooper was
the founder and sole  proprietor  of Agate 108, a  manufacturer  and retailer of
home  accessory  products,  from 1975 until 1998.  She is the wife of Wilfred N.
Cooper,  Sr., and the mother of Wilfred N. Cooper, Jr. Ms. Cooper graduated from
the University of Southern California in 1958 with a Bachelor of Science degree.

Item 11.  Executive Compensation

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  $181,385,
     $181,571 and $181,385  were  incurred  during each of the years ended March
     31, 2002, 2001 and 2000,  respectively.  The  Partnership  paid the General
     Partner  or its  affiliates,  $37,500,  $50,000  and  $12,500 of those fees
     during the years ended March 31, 2002, 2001 and 2000, respectively.

(b)  Subordinated  Disposition Fee. A subordinated  disposition fee in an amount
     equal to 1% of the  sale  price  received  in  connection  with the sale or
     disposition  of a Housing  Complex or Local Limited  Partnership  Interest.
     Subordinated  disposition  fees will be subordinated to the prior return of
     the Limited  Partners'  capital  contributions and payment of the Return on
     Investment to the Limited Partners. "Return on Investment" means an annual,
     cumulative but not compounded,  "return" to the Limited Partners (including
     Low  Income  Housing   Credits)  as  a  class  on  their  adjusted  capital
     contributions  commencing  for each Limited  Partner on the last day of the
     calendar quarter during which the Limited Partner's capital contribution is
     received by the  Partnership

                                       26
<PAGE>


     calculated at the following  rates:  (i) 16%
     through  December 31, 2003, and (ii) 6% for the balance of the Partnerships
     term. No disposition fees have been paid.

(c)  Operating  Expense.  The Partnership  reimbursed the General Partner or its
     affiliates for operating  expenses of  approximately  $20,000,  $23,000 and
     $9,000, during the years ended March 31, 2002, 2001 and 2000, respectively.

(d)  Interest in Partnership. The General Partner receives 1% of the
     Partnership's allocated Low Income Housing Credits, which approximated
     $20,000, $21,000 and $20,000 for the General Partner for the calendar years
     ended December 31, 2001, 2000 and 1999, respectively. The General Partner
     is also entitled to receive 1% of cash distributions. There were no
     distributions of cash to the General Partner during the years ended March
     31, 2002, 2001 and 2000.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          --------------------------------------------------------------

(a)  Security Ownership of Certain Beneficial Owners
     -----------------------------------------------

     No person is known to the General Partner to own  beneficially in excess of
     5% of the outstanding Units.

(b)  Security Ownership of Management
     --------------------------------
     Neither the General  Partner,  its  affiliates,  nor any of the officers or
     directors  of  the  General  Partner  or its  affiliates  own  directly  or
     beneficially any Units in the Partnership.

(c)  Changes in Control
     ------------------
     The  management  and control of the  General  Partner may be changed at any
     time in accordance with its organizational  documents,  without the consent
     or approval of the Limited Partners. In addition, the Partnership Agreement
     provides for the admission of one or more additional and successor  General
     Partners in certain circumstances.

     First,   with  the   consent   of  any  other   General   Partners   and  a
     majority-in-interest  of the  Limited  Partners,  any  General  Partner may
     designate  one or  more  persons  to be  successor  or  additional  General
     Partners. In addition,  any General Partner may, without the consent of any
     other General Partner or the Limited Partners,  (i) substitute in its stead
     as General  Partner  any  entity  which has,  by merger,  consolidation  or
     otherwise,  acquired  substantially  all  of its  assets,  stock  or  other
     evidence of equity interest and continued its business, or (ii) cause to be
     admitted to the Partnership an additional General Partner or Partners if it
     deems such  admission to be necessary or desirable so that the  Partnership
     will be classified a partnership for Federal income tax purposes.  Finally,
     a  majority-in-interest  of the Limited Partners may at any time remove the
     General Partner of the Partnership and elect a successor General Partner.

Item 13.  Certain Relationships and Related Transactions

The General Partner manages all of the Partnership's  affairs.  The transactions
with  the  General  Partner  are  primarily  in the  form  of  fees  paid by the
Partnership for services  rendered to the Partnership and the General  Partner's
interest in the  Partnership,  as  discussed  in Item 11 and in the notes to the
Partnership's financial statements.

                                       27
<PAGE>


PART IV.

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)(1)   Financial statements included in Part II hereof:
         -----------------------------------------------

         Report of Independent Certified Public Accountants
         Balance Sheets as of March 31, 2002 and 2001
         Statements of Operations for the years ended March 31, 2002, 2001 and
         2000
         Statements of Partners' Equity (Deficit) for the years ended March
         31, 2002, 2001 and 2000
         Statements of Cash Flows for the years ended
         March 31, 2002, 2001 and 2000
         Notes to Financial Statements

(a)(2)   Financial statement schedules included in Part IV hereof:
         --------------------------------------------------------

          Report  of  Independent  Certified  Public  Accountants  on  Financial
          Statement  Schedules Schedule III - Real Estate Owned by Local Limited
          Partnerships

(b)      Reports on Form 8-K.
         --------------------

         None

(c)      Exhibits.
         ---------

3.1      Agreement of Limited  Partnership  dated  October 5, 1992;  included as
         Exhibit B to the  Prospectus,  which was filed as Exhibit  28.1 to Form
         10-K for the year ended December 31, 1994 is hereby incorporated herein
         as Exhibit 3.1.

10.1     Amended  and  Restated  Agreement  of Limited  Partnership  of Colonial
         Village Roseville (1) filed as exhibit 10.1 to Form 8-K/A Amendment No.
         1 to Current  Report  dated  December  27, 1993 is hereby  incorporated
         herein by reference as exhibit 10.1.

10.2     Amended and Restated Agreement of Limited  Partnership of Almond Garden
         Apartment  Associates filed as exhibit 10.2 to Form 8-K/A Amendment No.
         1 to Current  Report  dated  December  27, 1993 is hereby  incorporated
         herein by reference as exhibit 10.2.

10.3     Amended  and  Restated  Agreement  of  Limited  Partnership  of Winters
         Investment Group filed as exhibit 10.3 to Form 8-K/A Amendment No. 1 to
         Current Report dated December 27, 1993 is hereby incorporated herein by
         reference as exhibit 10.3.

10.4     Third Amended and Restate Articles of Limited  Partnership of Buccaneer
         Associates,  Limited filed as exhibit 10.2 to Post-Effective  Amendment
         No. 2 to Form S-11  dated  September  17,  1993 is hereby  incorporated
         herein by reference as exhibit 10.4.

10.5     Amended and Restated  Agreement and Certificate of Limited  Partnership
         of Dallas County Housing,  Ltd. filed as exhibit 10.3 to Post-Effective
         Amendment  No.  2 to Form  S-11  dated  September  17,  1993 is  hereby
         incorporated herein by reference as exhibit 10.5.

10.6     Amended and Restated Agreement of Limited  Partnership of La Paloma Del
         Sol  Phase  II   Limited   Partnership   filed  as   exhibit   10.4  to
         Post-Effective Amendment No. 2 to Form S-11 dated September 17, 1993 is
         hereby incorporated herein by reference as exhibit 10.6.

10.7     Second  Amended and Restated  Agreement of Limited  Partnership  of Old
         Fort  Limited  Partnership  filed  as  exhibit  10.5 to  Post-Effective
         Amendment  No.  2 to Form  S-11  dated  September  17,  1993 is  hereby
         incorporated herein by reference as exhibit 10.7.
                                       28
<PAGE>


10.8     Amended  and  Restated  Agreement  of  Limited   Partnership  of  Orosi
         Apartments,  Ltd. filed as exhibit 10.6 to Post-Effective Amendment No.
         2 to Form S-11 dated September 17, 1993 is hereby  incorporated  herein
         by reference as exhibit 10.8.

10.9     Amended and  Restated  Agreement of Limited  Partnership  of Sun Manor,
         L.P.  filed as exhibit 10.7 to  Post-Effective  Amendment No. 2 to Form
         S-11  dated  September  17,  1993  is  hereby  incorporated  herein  by
         reference as exhibit 10.9.

10.10    Amended  and  Restated  Agreement  of  Limited   Partnership  of  Venus
         Retirement  Village,  Ltd.  filed  as  exhibit  10.8 to  Post-Effective
         Amendment  No.  2 to Form  S-11  dated  September  17,  1993 is  hereby
         incorporated herein by reference as exhibit 10.10.

10.11    Second  Amended  and  Restated  Agreement  of  Limited  Partnership  of
         Walnut-Pixley,  L.P. filed as exhibit 10.9 to Post-Effective  Amendment
         No. 2 to Form S-11  dated  September  17,  1993 is hereby  incorporated
         herein by reference as exhibit 10.11.

10.12    Amended and Restated  Agreement of Limited  Partnership  of Almond View
         Apartments,  Ltd. filed as exhibit 10.11 to Form 10K dated December 31,
         1993 is hereby incorporated herein by reference as exhibit 10.12.

10.13    Amended and Restated  Agreement of Limited  Partnership  of Candleridge
         Apartments  of Perry,  L.P. II filed as exhibit  10.1 to Form 8-K dated
         May 26,  1994 is hereby  incorporated  herein by  reference  as exhibit
         10.13.

10.14    Second Amended and Restated Agreement of Limited Partnership of Parlier
         Garden  Apts.  filed as exhibit  10.2 to Form 8-K dated May 26, 1994 is
         hereby incorporated herein by reference as exhibit 10.14.

10.15    Agreement  of  Limited   Partnership  of  Rosewood  Apartments  Limited
         Partnership  filed as  exhibit  10.3 to Form 8-K dated May 26,  1994 is
         hereby incorporated herein by reference as exhibit 10.15.

10.16    Agreement of Limited Partnership of Limited Partnership of Nueva Sierra
         Vista Associates filed as exhibit 10.4 to Form 8-K/A Amendment No. 1 to
         Current  Report  dated May 26,  1994 is hereby  incorporated  herein by
         reference as exhibit 10.16.

10.17    Amended and Restated  Agreement of Limited  Partnership  of Memory Lane
         Limited  Partnership  filed as  exhibit  10.1 to Form 8-K dated July 7,
         1994 is hereby incorporated herein by reference as exhibit 10.17.

10.18    Second Amended and Restated  Agreement of Limited  Partnership of Tahoe
         Pines  Apartments filed as exhibit 10.1 to Form 8-K dated July 27, 1994
         is hereby incorporated herein by reference as exhibit 10.18.

21.1     Financial  Statements of Colonial Village Roseville for the years ended
         December 31, 2000 and 1999 together with  independent  auditors' report
         thereon  filed as  exhibit  21.1 on Form 10-K dated  March 31,  2001 is
         hereby  incorporated  as exhibit 21.1; a significant  subsidiary of the
         Partnership.

21.2     Financial  Statements of Colonial Village Roseville for the years ended
         December 31, 2001 and 2000 together with  independent  auditors' report
         thereon; a significant subsidiary of the Partnership.

21.3     Financial  Statements  of Almond View  Apartments,  Ltd.  for the years
         ended  December 31, 2001 and 2000 together with  independent  auditors'
         report thereon; a significant subsidiary of the Partnership.

(d)      Financial statement schedules follow, as set forth in subsection (a)(2)
         ------------------------------------
         hereof.

                                       29
<PAGE>


Report of  Independent  Certified  Public  Accountants  on  Financial  Statement
Schedules





To the Partners
WNC California Housing Tax Credits III, L.P.


The audits referred to in our report dated April 26, 2002, relating to the 2002,
2001 and 2000 financial  statements of WNC  California  Housing Tax Credits III,
L.P.  (the  "Partnership"),  which are  contained  in Item 8 of this Form  10-K,
included  the audits of the  accompanying  financial  statement  schedules.  The
financial  statement  schedules  are  the  responsibility  of the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statement schedules based upon our audits.

In our opinion,  such  financial  statement  schedules  present  fairly,  in all
material respects, the financial information set forth therein.



                                               BDO SEIDMAN, LLP


Orange County, California
April 26, 2002

                                       30
<PAGE>


WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
<TABLE>
<CAPTION>


                                                               ----------------------------------  ---------------------------------
                                                                     As of March 31, 2002                  As of December 31, 2001
------------------------------------------------------------------------------------------------------------------------------------
                                           Total Investment   Amount of    Encumbrances of
                                           in Local Limited   Investment  of Local Limited  Property and    Accumulated     Net Book
          Partnership Name      Location    Partnerships      Paid to Date  Partnerships    Equipment       Depreciation       Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>             <C>           <C>             <C>              <C>          <C>
Almond Garden                   Delhi,
Apartment Associates            California   $   391,000     $  391,000    $ 1,381,000     $ 1,757,000      $ 510,000    $ 1,247,000

Almond View                     Stockton,
Apartments, Ltd.                California     1,639,000      1,639,000      1,754,000       3,526,000        934,000      2,592,000

Buccaneer Associates,           Fernandia
Limited                         Beach, Florida   365,000        365,000      1,468,000       2,218,000        460,000      1,758,000

Candleridge Apartments          Perry
of Perry L.P. II                Iowa             126,000        126,000        695,000         901,000        234,000        667,000

Colonial Village                Roseville
Roseville                       California     2,811,000      2,811,000      2,044,000       5,299,000      1,366,000      3,933,000

Dallas County                   Orrville
Housing, Ltd.                   Alabama          130,000        130,000        612,000         789,000        182,000        607,000

La Paloma del Sol               Deming, New
Limited Partnership             Mexico           254,000        254,000      1,424,000       1,789,000        367,000      1,422,000

Memory Lane                     Yankton,
Limited Partnership             South Dakota     151,000        151,000        680,000         874,000        375,000        499,000

Nueva Sierra                    Richgrove
Vista Associates                California     1,688,000      1,688,000      1,629,000       3,252,000        531,000      2,721,000

Old Fort Highway                Hidalgo
Limited Partnership             Texas            249,000        249,000      1,270,000       1,699,000        357,000      1,342,000

</TABLE>

                                       31
<PAGE>

WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
<TABLE>
<CAPTION>

                                                               ----------------------------------  ---------------------------------
                                                                     As of March 31, 2002                  As of December 31, 2001
------------------------------------------------------------------------------------------------------------------------------------
                                           Total Investment   Amount of    Encumbrances of
                                           in Local Limited   Investment  of Local Limited  Property and    Accumulated     Net Book
          Partnership Name      Location    Partnerships      Paid to Date  Partnerships    Equipment       Depreciation       Value
-----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>            <C>            <C>            <C>             <C>              <C>          <C>
Orosi Apartments                Orosi
Ltd.                            California       461,000        461,000      1,929,000       2,450,000        363,000      2,087,000

Parlier Garden                  Parlier
Apts                            California       453,000        453,000      1,699,000       2,195,000        427,000      1,768,000

Rosewood Apartments             Superior
Limited Partnership             Wisconsin        185,000        185,000        482,000         767,000        157,000        610,000

Sun Manor                       Itta Bena
L.P.                            Mississippi      230,000        230,000      1,051,000       1,344,000        361,000        983,000

Tahoe                           South Lake
Pines                           Tahoe
Apartments                      California     1,633,000      1,633,000      1,668,000       3,292,000        895,000      2,397,000

Venus Retirement                Venus
Village, Ltd.                   Texas            161,000        161,000        721,000         928,000        262,000        666,000

Walnut                          Orange
Pixley, L.P.                    California     1,078,000      1,078,000      1,693,000       2,768,000        577,000      2,191,000

Winters Investment              Winters
Group                           California
                                                 531,000        531,000      1,824,000       2,592,000        406,000      2,186,000
                                           --------------  ------------   ------------    -------------   -----------   ------------
                                           $  12,536,000   $ 12,536,000   $ 24,024,000    $ 38,440,000    $ 8,764,000   $ 29,676,000
                                           ==============  ============   ============    =============   ===========   ============
</TABLE>

                                       32


<PAGE>



WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002
<TABLE>
<CAPTION>
                                   ------------------------------------------------------------------------
                                                      For the year ended December 31, 2001
                                   ------------------------------------------------------------------------
                                                                          Year                     Estimated
                                                                      Investment                  Useful Life
     Partnership Name                 Rental Income       Net Loss      Acquired       Status        (Years)
-----------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>                  <C>                        <C>
Almond Garden Apartment Associates       $ 162,000    $ (50,000)           1994     Completed         27.5

Almond View Apartments, Ltd.               209,000     (230,000)           1994     Completed         27.5

Buccaneer Associates, Limited              222,000      (46,000)           1994     Completed           40

Candleridge Apartments of Perry
L.P. II                                    151,000      (11,000)           1994     Completed         27.5

Colonial Village Roseville                 450,000      (49,000)           1993     Completed         27.5

Dallas County Housing, Ltd.                 68,000      (17,000)           1993     Completed           40

La Paloma del Sol Limited
Partnership                                129,000      (38,000)           1993     Completed           40

Memory Lane Limited Partnership
                                            72,000      (20,000)           1994     Completed           25

Nueva Sierra Vista Associates              142,000     (101,000)           1994     Completed           40

Old Fort Limited Partnership               151,000      (40,000)           1993     Completed           40

Orosi Apartments, Ltd.                     193,000      (16,000)           1993     Completed           50

Parlier Garden Apts.                       202,000      (21,000)           1994     Completed           40

Rosewood Apartments Limited
Partnership                                 80,000       (4,000)           1994     Completed           40

Sun Manor, L.P.                            143,000      (26,000)           1993     Completed         27.5

Tahoe Pines Apartments                     182,000     (118,000)           1994     Completed         27.5

Venus Retirement Village, Ltd.              87,000      (18,000)           1993     Completed           25

Walnut - Pixley, L.P.                      150,000      (42,000)           1993     Completed           40

Winters Investment Group                   197,000      (29,000)           1994     Completed           50
                                      -----------     ----------
                                      $ 2,990,000     $(876,000)
                                      ============    ==========
</TABLE>


                                       33

<PAGE>

WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001

<TABLE>
<CAPTION>

                                                           ----------------------------------      ---------------------------------
                                                                     As of March 31, 2001                  As of December 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
                                           Total Investment   Amount of    Encumbrances of
                                           in Local Limited   Investment  of Local Limited  Property and    Accumulated     Net Book
          Partnership Name      Location    Partnerships      Paid to Date  Partnerships    Equipment       Depreciation       Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>             <C>           <C>             <C>              <C>          <C>
Almond Garden                   Delhi,
Apartment Associates            California   $   391,000     $  391,000    $ 1,386,000     $ 1,757,000      $ 448,000    $ 1,309,000

Almond View                     Stockton,
Apartments, Ltd.                California     1,639,000      1,639,000      1,761,000       3,525,000        809,000      2,716,000

Buccaneer Associates,           Fernandia
Limited                         Beach, Florida   365,000        365,000      1,473,000       2,218,000        406,000      1,812,000

Candleridge Apartments          Perry
of Perry L.P. II                Iowa             126,000        126,000        698,000         892,000        200,000        692,000

Colonial Village                Roseville
Roseville                       California     2,811,000      2,811,000      2,073,000       5,300,000      1,174,000      4,126,000

Dallas County                   Orrville
Housing, Ltd.                   Alabama          130,000        130,000        613,000         760,000        161,000        599,000

La Paloma del Sol               Deming, New
Limited Partnership             Mexico           254,000        254,000      1,429,000       1,784,000        320,000      1,464,000

Memory Lane                     Yankton,
Limited Partnership             South Dakota     151,000        151,000        682,000         875,000        341,000        534,000

Nueva Sierra                    Richgrove
Vista Associates                California     1,688,000      1,688,000      1,631,000       3,288,000        471,000      2,817,000

Old Fort Highway                Hidalgo
Limited Partnership             Texas            249,000        249,000      1,275,000       1,671,000        312,000      1,359,000

</TABLE>

                                       34
<PAGE>

  WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
<TABLE>
<CAPTION>

                                                               ----------------------------------  ---------------------------------
                                                                     As of March 31, 2001                  As of December 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
                                           Total Investment   Amount of    Encumbrances of
                                           in Local Limited   Investment  of Local Limited  Property and    Accumulated     Net Book
          Partnership Name      Location    Partnerships      Paid to Date  Partnerships    Equipment       Depreciation       Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>            <C>            <C>            <C>             <C>              <C>          <C>
Orosi Apartments                Orosi
Ltd.                            California       461,000        461,000      1,943,000       2,443,000        315,000      2,128,000

Parlier Garden                  Parlier
Apts                            California       453,000        453,000      1,705,000       2,193,000        376,000      1,817,000

Rosewood Apartments             Superior
Limited Partnership             Wisconsin        185,000        185,000        495,000         767,000        138,000        629,000

Sun Manor                       Itta Bena
L.P.                            Mississippi      230,000        230,000      1,055,000       1,341,000        313,000      1,028,000

Tahoe                           South Lake
Pines                           Tahoe
Apartments                      California     1,633,000      1,633,000      1,680,000       3,291,000        769,000      2,522,000

Venus Retirement                Venus
Village, Ltd.                   Texas            161,000        161,000        724,000         928,000        247,000        681,000

Walnut                          Orange
Pixley, L.P.                    California     1,078,000      1,078,000      1,710,000       2,765,000        518,000      2,247,000

Winters Investment              Winters
Group                           California
                                                 531,000        531,000      1,830,000       2,592,000        358,000      2,234,000
                                           --------------  ------------   ------------    -------------   -----------   ------------
                                           $  12,536,000   $ 12,536,000   $ 24,163,000    $ 38,390,000    $ 7,676,000   $ 30,714,000
                                           ==============  ============   ============    =============   ===========   ============
</TABLE>


                                       35
<PAGE>




WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001
<TABLE>
<CAPTION>
                                   ------------------------------------------------------------------------
                                                      For the year ended December 31, 2000
                                   ------------------------------------------------------------------------
                                                                          Year                     Estimated
                                                                      Investment                  Useful Life
     Partnership Name                 Rental Income       Net Loss      Acquired       Status        (Years)
-----------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>                  <C>                        <C>
Almond Garden Apartment Associates       $ 162,000    $ (55,000)           1994     Completed         27.5

Almond View Apartments, Ltd.               196,000     (212,000)           1994     Completed         27.5

Buccaneer Associates, Limited              206,000      (48,000)           1994     Completed           40

Candleridge Apartments of Perry
L.P. II                                    144,000      (17,000)           1994     Completed         27.5

Colonial Village Roseville                 425,000      (66,000)           1993     Completed         27.5

Dallas County Housing, Ltd.                 65,000      (18,000)           1993     Completed           40

La Paloma del Sol Limited
Partnership                                125,000      (34,000)           1993     Completed           40

Memory Lane Limited Partnership
                                            61,000      (36,000)           1994     Completed           25

Nueva Sierra Vista Associates              149,000     (108,000)           1994     Completed           40

Old Fort Limited Partnership               161,000      (24,000)           1993     Completed           40

Orosi Apartments, Ltd.                     189,000      (15,000)           1993     Completed           50

Parlier Garden Apts.                       203,000       (5,000)           1994     Completed           40

Rosewood Apartments Limited
Partnership                                 83,000        6,000            1994     Completed           40

Sun Manor, L.P.                            141,000      (24,000)           1993     Completed         27.5

Tahoe Pines Apartments                     174,000     (123,000)           1994     Completed         27.5

Venus Retirement Village, Ltd.              87,000      (23,000)           1993     Completed           25

Walnut - Pixley, L.P.                      146,000      (46,000)           1993     Completed           40

Winters Investment Group                   192,000      (23,000)           1994     Completed           50
                                      -----------     ----------
                                      $ 2,909,000     $(871,000)
                                      ============    ==========
</TABLE>


                                       36
<PAGE>


WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000

<TABLE>
<CAPTION>

                                                           ----------------------------------      ---------------------------------
                                                                     As of March 31, 2000                  As of December 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
                                           Total Investment   Amount of    Encumbrances of
                                           in Local Limited   Investment  of Local Limited  Property and    Accumulated     Net Book
          Partnership Name      Location    Partnerships      Paid to Date  Partnerships    Equipment       Depreciation       Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>             <C>           <C>             <C>              <C>          <C>
Almond Garden                   Delhi,
Apartment Associates            California   $   391,000     $  391,000    $ 1,390,000     $ 1,757,000      $ 383,000    $ 1,374,000

Almond View                     Stockton,
Apartments, Ltd.                California     1,639,000      1,639,000      1,767,000       3,525,000        682,000      2,843,000

Buccaneer Associates,           Fernandia
Limited                         Beach, Florida   365,000        365,000      1,477,000       2,218,000        353,000      1,865,000

Candleridge Apartments          Perry
of Perry L.P. II                Iowa             126,000        126,000        701,000         891,000        167,000        724,000

Colonial Village                Roseville
Roseville                       California     2,811,000      2,811,000      2,101,000       5,292,000        981,000      4,311,000

Dallas County                   Orrville
Housing, Ltd.                   Alabama          130,000        130,000        615,000         760,000        139,000        621,000

La Paloma del Sol               Deming, New
Limited Partnership             Mexico           254,000        254,000      1,434
,000       1,780,000        274,000      1,506,000

Memory Lane                     Yankton,
Limited Partnership             South Dakota     151,000        151,000        685,000         874,000        299,000        575,000

Nueva Sierra                    Richgrove
Vista Associates                California     1,688,000      1,688,000      1,633,000       3,253,000        373,000      2,880,000

Old Fort Highway                Hidalgo
Limited Partnership             Texas            249,000        249,000      1,279,000       1,657,000        266,000      1,391,000

</TABLE>

                                       37
<PAGE>

  WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>

                                           ----------------------------------   ----------------------------------------------------
                                           As of March 31, 2000                  As of December 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
                                           Total Investment   Amount of    Encumbrances of
                                           in Local Limited   Investment  of Local Limited  Property and    Accumulated     Net Book
          Partnership Name      Location    Partnerships      Paid to Date  Partnerships    Equipment       Depreciation       Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>            <C>            <C>            <C>             <C>              <C>          <C>
Orosi Apartments                Orosi
Ltd.                            California       461,000        461,000      1,955,000       2,442,000        268,000      2,174,000

Parlier Garden                  Parlier
Apts                            California       453,000        453,000      1,710,000       2,190,000        325,000      1,865,000

Rosewood Apartments             Superior
Limited Partnership             Wisconsin        185,000        185,000        507,000         767,000        118,000        649,000

Sun Manor                       Itta Bena
L.P.                            Mississippi      230,000        230,000      1,058,000       1,340,000        265,000      1,075,000

Tahoe                           South Lake
Pines                           Tahoe
Apartments                      California     1,633,000      1,633,000      1,692,000       3,289,000        642,000      2,647,000

Venus Retirement                Venus
Village, Ltd.                   Texas            161,000        161,000        726,000         929,000        212,000        717,000

Walnut                          Orange
Pixley, L.P.                    California     1,078,000      1,078,000      1,727,000       2,766,000        459,000      2,307,000

Winters Investment              Winters
Group                           California
                                                 531,000        531,000      1,836,000       2,592,000        311,000      2,281,000
                                           --------------  ------------   ------------    -------------   -----------   ------------
                                           $  12,536,000   $ 12,536,000   $ 24,293,000    $ 38,322,000    $ 6,517,000   $ 31,805,000
                                           ==============  ============   ============    =============   ===========   ============
</TABLE>


                                       38
<PAGE>





WNC California Housing Tax Credits III, L.P.
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000
<TABLE>
<CAPTION>
                                   ------------------------------------------------------------------------
                                                      For the year ended December 31, 1999
                                   ------------------------------------------------------------------------
                                                                          Year                     Estimated
                                                                      Investment                  Useful Life
     Partnership Name                 Rental Income       Net Loss      Acquired       Status        (Years)
-----------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>                  <C>                        <C>
Almond Garden Apartment Associates       $ 158,000    $ (52,000)           1994     Completed         27.5

Almond View Apartments, Ltd.               183,000     (230,000)           1994     Completed         27.5

Buccaneer Associates, Limited              197,000      (43,000)           1994     Completed           40

Candleridge Apartments of Perry
L.P. II                                    140,000      (12,000)           1994     Completed         27.5

Colonial Village Roseville                 402,000      (30,000)           1993     Completed         27.5

Dallas County Housing, Ltd.                 61,000      (19,000)           1993     Completed           40

La Paloma del Sol Limited
Partnership                                137,000      (22,000)           1993     Completed           40

Memory Lane Limited Partnership
                                            64,000      (36,000)           1994     Completed           25

Nueva Sierra Vista Associates              146,000     (139,000)           1994     Completed           40

Old Fort Limited Partnership               163,000      (17,000)           1993     Completed           40

Orosi Apartments, Ltd.                     183,000      (19,000)           1993     Completed           50

Parlier Garden Apts.                       190,000      (48,000)           1994     Completed           40

Rosewood Apartments Limited
Partnership                                 73,000      (10,000)           1994     Completed           40

Sun Manor, L.P.                            139,000      (27,000)           1993     Completed         27.5

Tahoe Pines Apartments                     178,000     (122,000)           1994     Completed         27.5

Venus Retirement Village, Ltd.              83,000      (22,000)           1993     Completed           25

Walnut - Pixley, L.P.                      141,000      (45,000)           1993     Completed           40

Winters Investment Group                   188,000      (46,000)           1994     Completed           50
                                      -----------     ----------
                                      $ 2,826,000     $(939,000)
                                      ============    ==========
</TABLE>


                                       39
<PAGE>



Pursuant to the  requirements of Section 13 or 15(d) 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, L.P.
General Partner of the Registrant

By:  WNC & Associates, Inc.
General Partner of WNC California Tax Credit Partners III, L.P.

By:  /s/ Wilfred N. Cooper, Jr.
     --------------------------
Wilfred N. Cooper, Jr., President
Chief Operating Officer of WNC & Associates, Inc.

Date: May 16, 2002


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

Date: May 16, 2002

By:  /s/ Wilfred N. Cooper, Sr.
     --------------------------
Wilfred N. Cooper, Sr., General Partner

Date: May 16, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.


By  /s/ Wilfred N. Cooper, Sr.
    --------------------------
Wilfred N. Cooper, Sr., Chairman of the Board of WNC & Associates, Inc.

Date: May 16, 2002

By:  /s/ David N. Shafer
     --------------------
David N Shafer, Director of WNC & Associates, Inc.

Date: May 16, 2002

                                       40

<PAGE>







Exhibit
Number    Exhibit  Description




EX-21.2   Financial Statements of Colonial Village

          Roseville.
























<PAGE>








Exhibit

Number                     Exhibit Description

EX-21.2                    Financial Statements of Colonial Village Roseville.




C O N T E N T S




                                                                            Page

INDEPENDENT AUDITOR'S REPORT ON
     THE FINANCIAL STATEMENTS..................................................1


FINANCIAL STATEMENTS

     Balance sheets......................................................... 2-3
     Statements of income.................................................   4-7
     Statements of changes in partners' equity................................ 8
     Statements of cash flows.............................................. 9-10
     Notes to financial statements.........................................11-14






<PAGE>




                          INDEPENDENT AUDITOR'S REPORT



To the Partners
Colonial Village Roseville
(A California Limited Partnership)
Roseville, California




I have audited the accompanying  balance sheets of Colonial Village Roseville (A
California  Limited  Partnership),  as of December  31,  2001 and 2000,  and the
related  statements of income,  partners'  equity,  and cash flows for the years
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing  standards.
Those standards  require that I plan and perform the audits to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of Colonial  Village  Roseville (A
California  Limited  Partnership)  as of  December  31,  2001 and 2000,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with generally accepted accounting principles.



                                             /s/     Bernard E. Rea, CPA
                                                     Bernard E. Rea, CPA

Stockton, California
March 8, 2002













                                       -1-
<PAGE>





                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                                 BALANCE SHEETS
                           December 31, 2001 and 2000
<TABLE>
<CAPTION>




                   ASSETS                                                         2000                        1999
                                                                                  -----                       -----


<S>                                                                                   <C>                         <C>
CURRENT ASSETS
     Cash                                                                             $  150,390                  $  128,354
     Rents receivable                                                                        - -                         - -
     Other receivables                                                                       - -                         - -
     Prepaid expense                                                                       3,250                       2,768
                                                                                      -----------                  ----------
                   Total current assets                                               $  153,640                  $  131,122
                                                                                      -----------                  ----------



RESTRICTED DEPOSITS AND FUNDED RESERVES
     Tenants' security deposits                                                       $   27,413                  $   25,692
     Replacement reserve escrow                                                          112,611                      97,897
                                                                                      -----------                  ----------
                                                                                      $  140,024                  $  123,589
                                                                                      -----------                  ----------



PROPERTY AND EQUIPMENT, AT COST
     Land                                                                             $  315,303                  $  315,303
     Building                                                                          4,808,665                   4,808,665
     Equipment                                                                           175,386                     175,386
                                                                                      -----------                  ----------
                                                                                      $5,299,354                  $5,299,354
     Less accumulated depreciation                                                     1,366,364                   1,173,502
                                                                                      -----------                  ----------
                                                                                      $3,932,990                  $4,125,852
                                                                                      -----------                  ----------


OTHER ASSETS
     Deferred charges, less accumulated
         amortization of $34,088 and $28,875                                          $   99,334                  $  104,547
                                                                                      -----------                  ---------
                                                                                      $   99,334                  $  104,547
                                                                                      -----------                  ---------





                                                                                      $4,325,988                  $4,485,110
                                                                                      ===========                 ===========
</TABLE>










See Notes to Financial Statements.
                                      - 2 -
<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                                 BALANCE SHEETS
                           December 31, 2001 and 2000
<TABLE>
<CAPTION>




                   LIABILITIES AND PARTNERS' EQUITY                               2001                        2000
                                                                                  -----                       ----


<S>                                                                                 <C>                         <C>
CURRENT LIABILITIES
     Current maturities of long-term debt                                           $    32,038                 $    29,679
     Accounts payable                                                                     7,803                       3,264
     Accounts payable - general partner                                                   7,737                       9,768
     Accrued expense                                                                        800                         800
     Developer fees payable                                                              27,500                      26,500
     Advances from general partner, without
         interest, due date, or collateral                                                  - -                         - -
     Accrued interest                                                                       - -                         - -
                                                                                    ------------                -----------
                   Total current liabilities                                        $    75,878                 $    70,011
                                                                                    ------------                -----------



DEPOSIT AND PREPAYMENT LIABILITIES
     Tenants' security deposits                                                     $    27,054                 $    26,164
     Prepaid rents                                                                          - -                         - -
                                                                                    ------------                -----------
                                                                                    $    27,054                 $    26,164
                                                                                    ------------                -----------



LONG-TERM DEBT
     Mortgage payable, less current maturities                                      $ 2,011,619                 $ 2,043,658
     Developer fees payable                                                             287,553                     355,053
                                                                                    ------------                ------------
                                                                                    $ 2,299,172                 $ 2,398,711
                                                                                    ------------                ------------

COMMITMENT


PARTNERS' EQUITY                                                                    $ 1,923,884                 $ 1,990,224
                                                                                    ------------                ------------





                                                                                    $ 4,325,988                 $ 4,485,110
                                                                                    ============                ============
</TABLE>









See Notes to Financial Statements.
                                      - 3 -
<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                              STATEMENTS OF INCOME
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>




                                                                                   2001                        2000
                                                                                  -----                        ----

<S>                                                                                    <C>                         <C>
RENTAL INCOME
     Apartments                                                                        $ 450,465                   $ 424,721
     Tenant assistance payments                                                              - -                         - -
     Furniture and equipment                                                                 - -                         - -
     Commercial                                                                              - -                         - -
     Parking spaces                                                                          - -                         - -
     Subsidy income                                                                          - -                         - -
     Miscellaneous                                                                           - -                         - -
                                                                                       ----------                  ----------
             Net rental revenue                                                        $ 450,465                   $ 424,721
                                                                                       ----------                  ----------



FINANCIAL REVENUE
     Interest Income - project operations                                              $   4,541                   $   1,708
     Income from investments - replacement reserve                                         3,905                       4,525
     Income from investments - operating reserve                                           4,028                       1,884
     Income from investments - miscellaneous                                                 - -                         - -
                                                                                       ---------                   ----------
         Sub-total financial revenue                                                   $  12,474                   $   8,117
                                                                                       ---------                   ----------



OTHER REVENUE
     Laundry and vending                                                               $   6,848                   $   7,921
     NSF and late charges                                                                  1,511                       2,339
     Damage and cleaning fees                                                              5,463                       4,204
     Forfeited tenant security deposits                                                      - -                         - -
     Other revenue                                                                         1,654                       3,094
                                                                                       ----------                  ----------
         Sub-total other revenue                                                       $  15,476                   $  17,558
                                                                                       ----------                  ----------



                    Total revenues                                                     $ 478,415                   $ 450,396
                                                                                       ----------                  ----------

</TABLE>











See Notes to Financial Statements.


                                      - 4 -
<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                        STATEMENTS OF INCOME (CONTINUED)
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>




                                                                                   2001                        2000
                                                                                   -----                       ----

<S>                                                                                    <C>                          <C>
OPERATING EXPENSES

     Renting expenses
         Advertising                                                                   $      - -                   $    - -
         Miscellaneous renting expenses                                                       550                      4,505
                                                                                       -----------                  ----------
                  Sub-total renting expenses                                           $      550                   $  4,505
                                                                                       -----------                  ----------


     Administrative expenses
         Office salaries                                                               $      - -                   $     - -
         Office supplies                                                                    1,743                       1,957
         Office rent                                                                          - -                         - -
         Management fee                                                                    24,192                      24,192
         Manager's salary                                                                  23,647                      20,147
         Manager rent free unit                                                             9,792                         - -
         Legal expense                                                                        - -                         210
         Audit expense                                                                      4,900                       4,868
         Bookkeeping / accounting services                                                    - -                         - -
         Telephone and answering service                                                    1,401                       2,099
         Bad debts                                                                          2,207                       3,673
         Miscellaneous administrative expenses                                              8,702                       5,815
                                                                                       -----------                  ----------
                  Sub-total administrative expenses                                    $   76,584                   $  62,961
                                                                                       -----------                  ----------


     Utilities expense
         Fuel oil / coal                                                               $      - -                   $     - -
         Electricity                                                                        4,468                       5,493
         Water                                                                              3,052                       3,363
         Gas                                                                                3,806                       2,088
         Sewer                                                                              5,390                       5,843
                                                                                       -----------                  ----------
                  Sub-total utilities expense                                          $   16,716                   $  16,787
                                                                                       -----------                  ----------
</TABLE>














See Notes to Financial Statements.
                                      - 5 -
<PAGE>


                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                        STATEMENTS OF INCOME (CONTINUED)
                     Years Ended December 31, 2001 and 2000

<TABLE>
<CAPTION>



                                                                                   2001                        2000
                                                                                  -----                        ----

<S>                                                                                    <C>                          <C>
     Operating and maintenance expense
         Janitor and cleaning payroll                                                  $    7,025                   $     - -
         Janitor and cleaning supplies                                                        934                         896
         Janitor and cleaning contract                                                      1,665                       1,965
         Exterminating payroll / contract                                                     867                         741
         Exterminating supplies                                                               - -                         - -
         Garbage and trash removal                                                          7,031                       8,278
         Security payroll / contract                                                          - -                         - -
         Grounds payroll                                                                      - -                         - -
         Grounds supplies                                                                     224                         551
         Grounds contract                                                                   7,395                       6,020
         Repairs payroll                                                                   18,980                      23,916
         Repairs material                                                                   3,258                       4,016
         Repairs contract                                                                   6,395                       3,314
         Elevator maintenance / contract                                                      - -                         - -
         Heating / cooling repairs and maintenance                                            - -                         - -
         Swim pool maintenance / contract                                                     - -                         - -
         Snow removal                                                                         - -                         - -
         Decorating payroll / contract                                                        859                       1,041
         Decorating supplies                                                                1,220                         978
         Vehicle and maintenance equipment o & r                                              - -                         - -
         Miscellaneous operating and maint. expenses                                        1,665                       2,668
                                                                                       ------------                 ----------
                  Sub-total operating & maint. expense                                 $   57,518                   $  54,384
                                                                                       ------------                 ----------


     Taxes and insurance
         Real estate taxes                                                             $      313                   $   1,850
         Payroll taxes                                                                      4,616                       4,088
         Miscellaneous taxes, licenses, and permits                                           800                         800
         Property and liability insurance                                                   4,374                       4,349
         Fidelity bond insurance                                                              - -                         - -
         Workman's compensation                                                             3,524                       2,646
         Health insurance and other employee benefits                                       6,688                       5,992
         Other insurance                                                                      - -                         - -
                                                                                       ----------                   ----------
                  Sub-total taxes & insurance                                          $   20,315                   $ 19,725
                                                                                       ----------                   ----------


                    Total operating expenses                                           $  171,683                   $ 158,362
                                                                                       ----------                   ---------
</TABLE>








See Notes to Financial Statements.
                                      - 6 -

<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                        STATEMENTS OF INCOME (CONTINUED)
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>




                                                                                   2001                        2000
                                                                                   -----                       ----

<S>                                                                                    <C>                         <C>
OTHER EXPENSES
     Interest expense - mortgage                                                       $ 157,997                   $ 160,180
     Interest expense - notes                                                                - -                         - -
     Miscellaneous financial expense                                                         - -                         - -
     Depreciation and amortization                                                       198,075                     197,448
     Non project expenses                                                                    - -                         - -
                                                                                       ----------                  ---------
         Sub-total other expenses                                                      $ 356,072                   $ 357,628
                                                                                       ----------                  ---------


                    Total expenses                                                     $ 527,755                   $ 515,990
                                                                                       ----------                  ---------


                    Net income (loss)                                                  $ (49,340)                  $ (65,594)
                                                                                       ==========                  ==========
</TABLE>















See Notes to Financial Statements.
                                                            - 7 -
<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                         STATEMENTS OF PARTNERS' EQUITY
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>



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

<S>                                                    <C>                         <C>                     <C>
Partners' equity
     December 31, 1999                                 $2,055,818                  $ 45,999                $ 2,009,819

Partners' capital
     Contributions                                             - -                       - -                       - -

Partners' capital
     Distributions                                             - -                       - -                       - -

Net income (loss)                                         (65,594)                     (656)                  (64,938)
                                                       ------------                ---------                 ---------

Partners' equity
     December 31, 2000                                 $1,990,224                  $ 45,343                 $1,944,881

Partners' capital
     Contributions                                             - -                       - -                       - -

Partners' capital
     Distributions                                        (17,000)                       - -                  (17,000)

Net income (loss)                                         (49,340)                     (493)                  (48,847)
                                                       -----------                 ----------               -----------

Partners' equity
     December 31, 2001                                 $1,923,884                  $ 44,850                $1,879,034
                                                       ===========                 =========               ===========



Percentage at
     December 31, 2001                                        100%                        1%                       99%
                                                       ===========                 ==========               ===========
</TABLE>






See Notes to Financial Statements.
                                                         - 8 -
<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>




                                                                                    2001                        2000
                                                                                   -----                        ----
<S>                                                                                    <C>                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                                                                 $  (49,340)                  $ (65,594)
     Adjustments to reconcile net income
      (loss) to net cash provided by
       (used in) operating activities:
         Depreciation and amortization                                                    198,075                     197,448
         Change in assets and liabilities:
          Decrease (increase) in:
                  Prepaid expenses                                                           (482)                        171
                  Tenants' security deposits                                               (1,721)                       (789)
                  Rents receivable                                                             - -                        587
                  Other receivables                                                            - -                        - -
          Increase (decrease) in:
                  Accounts payable                                                          4,539                      (4,757)
                  Accounts payable - general partner                                       (2,031)                      9,768
                  Accrued expenses                                                             - -                        - -
                  Accrued interest                                                             - -                        - -
                  Prepaid rents                                                                - -                        - -
                  Tenants' security deposits                                                  890                       2,200
                                                                                       -----------                  ----------
                   Net cash provided by (used in)
                        operating activities                                           $  149,930                   $ 139,034
                                                                                       -----------                  ---------


CASH FLOWS FROM INVESTING ACTIVITIES
     Funding of replacement reserve escrow                                             $  (14,714)                  $ (21,137)
     Withdrawals from replacement reserve escrow                                               - -                         - -
     Acquisition of property and equipment                                                     - -                     (7,721)
                                                                                       ------------                 ----------
                   Net cash provided by (used in)
                       investing activities                                            $  (14,714)                  $ (28,858)
                                                                                       ------------                 ----------


CASH FLOWS FROM FINANCING ACTIVITIES
     Partner contributions                                                             $      - -                     $      - -
     Partner distributions                                                                (17,000)                        - -
     Advances from general partner                                                             - -                     (7,355)
     Payment of development fees payable                                                  (66,500)                    (25,500)
     Principal payments on long-term debt                                                 (29,680)                    (27,495)
                                                                                       ------------                 ----------
                   Net cash provided by (used in)
                       financing activities                                            $ (113,180)                  $ (60,350)
                                                                                       ------------                 ----------
</TABLE>



See Notes to Financial Statements.
                                                             - 9 -
<PAGE>

                           COLONIAL VILLAGE ROSEVILLE
                       (A California Limited Partnership)

                      STATEMENTS OF CASH FLOWS (CONTINUED)
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>




                                                                                    2001                        2000
                                                                                   -----                     ----


<S>                                                                                    <C>                         <C>
                   Increase (decrease) in cash and
                       cash equivalents                                                $   22,036                  $ - 49,826

Cash and cash equivalents
     Beginning                                                                            128,354                      78,528
                                                                                       ----------                    --------

     Ending                                                                            $  150,390                  $  128,354
                                                                                       ===========                 ==========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION
         Cash paid during the year for interest                                        $  157,997                  $  160,180
                                                                                       ===========                 ==========
</TABLE>









See Notes to Financial Statements.
                                     - 10 -


<PAGE>


COLONIAL VILLAGE ROSEVILLE
--------------------------
(A California Limited Partnership)
----------------------------------

NOTES TO FINANCIAL STATEMENTS
-----------------------------




NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of the Partnership's significant accounting policies consistently
     applied  in  the  preparation  of  the  accompanying  financial  statements
     follows.

      Capitalization and Depreciation
      -------------------------------

     Land,  buildings and  improvements  are recorded at cost.  Depreciation  of
     buildings  and  equipment  is  computed   principally  using  the  Modified
     Accelerated  Cost  Recovery  System which  approximates  straight-line  for
     buildings and  double-declining  balance for  equipment  over the following
     estimated useful lives:


                                                   Years
                                                   -----

                     Buildings                     27.5
                     Equipment                        7

     Improvements  are  capitalized,  while  expenditures  for  maintenance  and
     repairs are charged to expense as incurred.  Upon  disposal of  depreciable
     property,  the  appropriate  property  accounts  are reduced by the related
     costs and  accumulated  depreciation.  The  resulting  gains and losses are
     reflected in the statement of operations.

     Cash and cash equivalents
     -------------------------

     For purposes of reporting  the  statements of cash flows,  the  Partnership
     includes all cash accounts which are not subject to withdrawal restrictions
     or  penalties,  and all highly  liquid debt  instruments  purchased  with a
     maturity  of  three  months  or less as cash and  cash  equivalents  on the
     accompanying balance sheet.

     Amortization
     ------------

     Deferred  charges are amortized over the following  estimated  useful lives
     using the straight-line method:


                                                   Years

                     Deferred debt expense         30
                     Tax credit monitoring fee     15

     Income Taxes
     ------------

     No  provision  or  benefit  for  income  taxes has been  included  in these
     financial statements since taxable income or loss passes through to, and is
     reportable by, the partners individually.

                                     - 11 -

<PAGE>

NOTES TO FINANCIAL STATEMENTS
-----------------------------




Note 1 - Summary of Significant Accounting Policies (continued)

      Estimates
      ---------

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions that affect certain reported amounts and disclosures.

     Personal Assets and Liabilities
     -------------------------------

     In accordance with the generally accepted method of presenting  partnership
     financial statements,  the financial statements do not include the personal
     assets and  liabilities  of the partners,  including  their  obligation for
     income  taxes  on  their  distributive  shares  of the  net  income  of the
     Partnership, nor any provision for income tax expense.


NOTE 2 - ORGANIZATION

     Colonial Village  Roseville is a California  Limited  Partnership which was
     formed in April 1993, to develop,  construct,  own,  maintain and operate a
     56-unit  multi-family  apartment  complex  and is  located  in the  city of
     Roseville,  California.  The  Partnership  Agreement and the loan agreement
     with the California Community Reinvestment Corporation (CCRC), a California
     nonprofit  public benefit  corporation  governs the major activities of the
     Partnership.  Under the agreements,  the Partnership is required to provide
     low cost housing to very low-income or lower-income households.

      The Partnership has one general partners, Project Go Inc., a 501(c)(3) tax
      exempt, non-profit community service organization and one investing
      limited partner, WNC Housing Tax Credits III, L.P., a California limited
      partnership. Partnership transactions with the partners are described in
      other notes to these financial statements.


NOTE 3 - Deferred charges

      Deferred charges as of December 31, 2001 and 2000, consists of the
following:

                                                2001                  2000
                                             ---------------   -----------------

      Deferred debt expense                  $       110,462   $       110,462
      Tax credit monitoring fee                       22,960            22,960
                                             ---------------   -----------------

                                             $       133,422   $       133,422

 Less accumulated amortization                        34,088            28,875
                                             ----------------  -----------------


                                             $        99,334   $       104,547
                                             ===============   =================
                                     - 12 -
<PAGE>

                         NOTES TO FINANCIAL STATEMENTS

Note 4 - Restricted deposits and Funded reserves

     In accordance with the  Partnership  Agreement and the Rider to Multifamily
     Instrument with CCRC, the Partnership is required to maintain a replacement
     reserve account.  The replacement  reserve account is to be funded annually
     in the amount of $16,800.


Note 5 - Long-Term Debt

     Long-Term  debt  consisted of a permanent  loan with CCRC in face amount of
     $2,200,000.

     Under the terms of the 30-year Promissory Note with CCRC, the loan provides
     for an initial  interest  rate of 7.67% and monthly  payments of $15,639.62
     commencing on September 1, 1995,  and  continuing  through August 2025. The
     interest rate and monthly  payment will be adjusted at year eleven (11) and
     year  twenty-one  (21),  at which time the  interest  rate will be adjusted
     based on the Current  Index plus 2.75% and the payment will be adjusted and
     determined by the amount of the monthly payment that would be sufficient to
     repay  the note  within  360  months of the  initial  payment  date.  As Of
     December 31, 2001, the current  interest rate, and minimum  monthly payment
     due is 7.67% and $15,639.62, respectively.

     The  apartment  complex is pledged as  collateral  for the  mortgage and is
     secured by deeds of trust,  assignment of rents,  security  agreements  and
     fixture filings against the property.

     Aggregate  maturities  of  Long-term  debt for the next  five  years are as
     follows:

                  December 31,   2002      $      32,038
                                 2003             34,583
                                 2004             37,331
                                 2005             40,297
                                 2006             43,499
                              Thereafter       1,855,909
                                               ---------
                                TOTAL      $   2,043,657


NOTE 6 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

     Developer Fees
     --------------
     In accordance with the Partnership Agreement, the Partnership agreed to pay
     the general partner a development fee of $648,000 for services  rendered to
     the  Partnership  for overseeing the  development  and  construction of the
     project.  However,  during 1995,  $3,526,  of this amount was waived by the
     general  partner  in  accordance  with  the  limitations   imposed  by  the
     California Tax Credit Allocation Committee.

     Payment of the development fee is to be paid from future  operational  cash
     flows.

     The developer fee has been capitalized into the basis of the building.

     Management Fee
     --------------
     In accordance with the Management  Agreement,  the Partnership paid Project
     Go, Inc., the general  partner,  a management fee during 2001 in the amount
     of  $24,192,  for  services  rendered  in  connection  with the leasing and
     operation of the project.  The fee for its services is  approximately 6% of
     the project's rental income.

                                     - 13 -

<PAGE>

                         NOTES TO FINANCIAL STATEMENTS




Note 7 - Commitment

     The  Partnership  entered into a Regulatory  Agreement  with the Tax Credit
     Allocation Committee (TCAC),  established under Section 50185 of the Health
     and  Safety  Code of the State of  California.  Under this  Agreement,  the
     Partnership  shall maintain the project as a Qualified  Low-income  Housing
     Project for a period of 55 consecutive  taxable years  beginning with 1995,
     the  first  taxable  year  of the  Credit  Period.  In  exchange  for  this
     agreement,  TCAC has  authorized an allocation  relating to the  low-income
     housing credit under the  provisions of Section 42 of the Internal  Revenue
     Code.


Note 8 - Current VULNERABILITY due to certain concentrations

     The Partnership's sole asset is Colonial Village Roseville Apartments.  The
     Partnership's  operations are  concentrated in the multifamily  real estate
     market.















                                     - 14 -


<PAGE>












Exhibit
Number                     Exhibit Description

EX-21.3                    Financial Statements of Almond
                           View Apartments, Ltd.










<PAGE>


                                 C O N T E N T S


                                                                            Page

INDEPENDENT AUDITORS' REPORT ON THE
   FINANCIAL STATEMENTS                                                        1

FINANCIAL STATEMENT

   Balance sheets                                                              2
   Statements of income                                                        3
   Statements of partners' equity                                              4
   Statements of cash flows                                                    5
   Notes to financial statements                                             6-8


<PAGE>









                          INDEPENDENT AUDITORS' REPORT




To the Partners
Almond View Apartments, Ltd.
(A California Limited Partnership)
Sacramento, California

We have audited the accompanying balance sheets of Almond View Apartments, Ltd.,
A California  Limited  Partnership,  as of December  31, 2001 and 2000,  and the
related  statements of income,  partners'  equity,  and cash flows for the years
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain  reasonable  assurance  about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Almond View Apartments, Ltd., A
California Limited Partnership, as of December 31, 2001 and 2000 and the results
of its  operations  and cash flows for the years then ended in  conformity  with
accounting principles generally accepted in the United States of America.



                                               /s/ Bowman & Company, LLP
                                                   Bowman & Company, LLP








Stockton, California
January 22, 2002

                                      -1-
<PAGE>


                          ALMOND VIEW APARTMENTS, LTD.
                       (A California Limited Partnership)

                                 BALANCE SHEETS
                           December 31, 2001 and 2000
<TABLE>
<CAPTION>




<S>                                                                  <C>                      <C>
               ASSETS                                                       2001                     2000
                                                                     --------------------     --------------------

Cash                                                                 $                300     $                300
Rent receivable                                                                     4,228                    4,228
Reserve for replacements                                                              709                      799
Utility deposit                                                                     8,340                    8,340
                                                                     --------------------     --------------------
                                                                                   13,577                   13,667
                                                                     --------------------     ---------------------

PROPERTY AND EQUIPMENT, at cost
   Land                                                                           110,000                  110,000
   Building and improvements                                                    3,313,023                3,311,743
   Furniture and fixtures                                                         103,489                  103,489
                                                                     --------------------     --------------------
                                                                                3,526,512                3,525,232
   Less accumulated depreciation                                                  934,428                  809,139
                                                                     --------------------     --------------------
                                                                                2,592,084                2,716,093
                                                                     --------------------     --------------------

                                                                     $          2,605,661     $          2,729,760
                                                                     ====================     ====================



               LIABILITIES AND PARTNERS' EQUITY

LIABILITIES
   Outstanding checks in excess of bank balance                      $             11,405     $              6,411
   Accounts payable and accrued expenses                                           33,151                   32,191
   Due to affiliate of general partner                                            219,237                  177,985
   Tenant security deposits                                                        10,750                    9,216
   Accrued interest                                                               480,496                  415,772
   Mortgages payable                                                            1,753,600                1,760,757
                                                                     --------------------     --------------------
         Total liabilities                                                      2,508,639                2,402,332

PARTNERS' EQUITY                                                                   97,022                  327,428
                                                                     --------------------     --------------------

                                                                     $          2,605,661     $          2,729,760
                                                                     ====================     ====================
</TABLE>


See Notes to Financial Statements.

                                      -2-

<PAGE>


                          ALMOND VIEW APARTMENTS, LTD.
                       (A California Limited Partnership)

                              STATEMENTS OF INCOME
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>



                                                                            2001                     2000
                                                                     -------------------      ---------------------
<S>                                                                  <C>                      <C>
REVENUE:
   Rental income                                                     $           208,799      $           196,101
   Other income                                                                    1,979                    9,541
                                                                     -------------------      -------------------
      Total revenue                                                              210,778                  205,642
                                                                     -------------------      -------------------

OPERATING EXPENSES:
   Depreciation                                                                  125,289                  127,201
   Interest                                                                       97,515                   95,858
   Utilities                                                                      73,402                   49,120
   Payroll                                                                        72,105                   71,151
   Property taxes                                                                 23,480                   22,471
   Management fee                                                                 15,552                   15,552
   Repairs and maintenance                                                        10,227                   11,930
   Insurance                                                                       7,239                    8,021
   Payroll taxes                                                                   6,915                    8,556
   Office and administration                                                       5,493                    4,064
   Telephone                                                                       2,214                    2,290
   Other taxes                                                                     1,018                      982
   Legal and accounting                                                              735                      822
                                                                     -------------------      -------------------

      Total operating expenses                                                   441,184                  418,018
                                                                     -------------------      -------------------

   Net loss                                                          $          (230,406)     $          (212,376)
                                                                     ===================      ===================
</TABLE>



See Notes to Financial Statements.

                                      -3-
<PAGE>


                          ALMOND VIEW APARTMENTS, LTD.
                       (A California Limited Partnership)

                         STATEMENTS OF PARTNERS' EQUITY
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>


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

<S>                                                      <C>                 <C>                  <C>
Balance, December 31, 1999                               $      539,804      $       435,311      $       104,493

Less: Net loss                                                 (212,376)            (210,252)              (2,124)
                                                         --------------      ---------------      ---------------

Balance, December 31, 2000                                      327,428              225,059              102,369

Less: Net loss                                                 (230,406)            (209,346)             (21,060)
                                                         --------------      ---------------      ---------------

Balance, December 31, 2001                               $       97,022      $        15,713      $        81,309
                                                         ==============      ===============      ===============

</TABLE>


See Notes to Financial Statements.

                                      -4-
<PAGE>


                          ALMOND VIEW APARTMENTS, LTD.
                       (A California Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                     Years Ended December 31, 2001 and 2000
<TABLE>
<CAPTION>



                                                                               2001                   2000
                                                                         ----------------          ----------------
<S>                                                                      <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                              $        (230,406)        $     (212,376)
   Adjustments to reconcile net loss to net cash
   provided by operating activities:
      Depreciation                                                                 125,289                127,201
      Change in assets and liabilities:
         (Increase) decrease in:
            Replacement reserve                                                         90                     76
         Increase (decrease) in:
            Outstanding checks in excess of bank balance                             4,993                  3,700
            Accounts payable and accrued expenses                                      961                 (5,824)
            Due to affiliate of general partner                                     41,252                 28,764
            Tenant security deposits                                                 1,534                  2,477
            Accrued interest                                                        64,724                 62,568
                                                                         ------------------       -----------------
               Net cash provided by operating activities                             8,437                  6,586
                                                                         ------------------       -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of building improvements                                                (1,280)                   - -
                                                                         ------------------       -----------------
               Net cash used in investing activities                                (1,280)                   - -
                                                                         ------------------       -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Principal payments on long-term borrowings                                       (7,157)                (6,658)
                                                                         ------------------       -----------------
               Net cash used in financing activities                                (7,157)                (6,658)
                                                                         ------------------       -----------------

               Increase (decrease) in cash                                             - -                    (72)

Cash
   Beginning                                                                           300                    372
                                                                          -----------------       -----------------
   Ending                                                                $             300        $           300
                                                                         ==================       =================


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   Cash payments for interest                                            $          32,791        $        33,290
                                                                         =================        =================
</TABLE>



See Notes to Financial Statements.

                                      -5-
<PAGE>


                          ALMOND VIEW APARTMENTS, LTD.
                       (A California Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS



Note 1. Organization and Summary of Significant Accounting Policies

         Organization:

         Almond View  Apartments,  Ltd. (A California  Limited  Partnership) was
         formed  in  September  1992 to own and  operate  a  72-unit  efficiency
         facility,  known  as  the  Main  Street  Manor,  located  in  Stockton,
         California. The project was completed and placed in service in December
         1994. The project provides  low-cost housing to low and very low-income
         residents. Below-market rents are made possible because of below-market
         interest rates and deferred payments on the Partnership's debt with the
         City of Stockton.  Rents from tenants are restricted  under  Regulatory
         Agreements  with the City of  Stockton  and the  California  Tax Credit
         Allocation Committee.

         As of January 1, 2001, one of the general  partners,  Daniels C. Logue,
         retired from the Partnership. The sole remaining general partner, Cyrus
         Youssefi, assumed his partnership interest.

         Summary of significant accounting policies:

         Cash
         ----

         For purposes of reporting the statements of cash flows, the Partnership
         includes  all  cash  accounts  which  are  not  subject  to  withdrawal
         restrictions  or  penalties,  and all highly  liquid  debt  instruments
         purchased  with a  maturity  of  three  months  or  less as cash on the
         accompanying balance sheet.

         Depreciation
         ------------

         Depreciation is computed principally using the straight-line method for
         the building and improvements and  double-declining  balance method for
         furniture and fixtures over the following estimated useful lives:

                                                             Years
                                                             -----
               Building and improvements                      27.5
               Furniture and fixtures                            7

         Personal assets and liabilities
         -------------------------------

         In  accordance  with  the  generally   accepted  method  of  presenting
         partnership  financial  statements,  the financial  statement  does not
         include the personal assets and liabilities of the partners,  including
         their obligation for income taxes on their  distributive  shares of the
         net  income  of the  Partnership,  nor any  provision  for  income  tax
         expense.


                                      -6-
<PAGE>


                          NOTES TO FINANCIAL STATEMENTS



Note 1.Organization and Summary of Significant Accounting Policies (cont.)

       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 certain reported
       amounts and  disclosures.  Accordingly,  actual results could differ from
       those estimates.

Note 2.Mortgages Payable
<TABLE>
<CAPTION>
                                                                                   2001              2000
                                                                                   ----              ----

<S>                                                                              <C>            <C>
       Mortgage loan payable to the  California  Federal Bank payable in monthly
       installments  of $3,329  through  March 2025,  with interest at 7.25% per
       year. This note is secured by a first deed of trust on the  Partnership's
       property.  Accrued  interest is $2,708 at December  31, 2001.             $ 448,373      $   455,530

       Mortgage  loan  payable  to  the  Redevelopment  Agency  of the  City  of
       Stockton,  interest  at 3%,  secured  by a  second  deed of  trust on the
       Partnership's  property,  in accordance with the Intercreditor  Agreement
       between the City of Stockton and the Redevelopment  Agency of the City of
       Stockton. Interest is payable to the extent of net cash flow, only to the
       extent that income  exceeds 115% of expenses,  as defined in the note. If
       cash flow is insufficient,  debt service payments are deferred. Principal
       will be  amortized  over a 15 year period  once all  accrued  interest is
       paid. All principal and interest is due November 2033.  Accrued  interest
       is $138,729 at December 31, 2001.                                           550,000         550,000

       Mortgage loan payable to the City of Stockton, interest at 5.84%, secured
       by a second deed of trust on the  Partnership's  property,  in accordance
       with the  Intercreditor  Agreement  between the City of Stockton  and the
       Redevelopment Agency of the City of Stockton.  Interest is payable to the
       extent of net cash flow, only to the extent that in- come exceeds 115% of
       expenses,  as defined  in the note.  If cash flow is  insufficient,  debt
       service  payments are de- ferred.  Principal  will be amortized over a 30
       year  period  once all  accrued  interest  is paid.  Accrued  interest is
       $260,966 at December 31, 2001.                                              444,878         444,878
</TABLE>


                                      -7-
<PAGE>


                          NOTES TO FINANCIAL STATEMENTS



Note 2.     Mortgages Payable (cont.)

       Mortgage  loan  payable  to  the  Redevelopment  Agency  of the  City  of
       Stockton,  interest  at 3%,  secured  by a  second  deed of  trust on the
       Partnership's  property,  in accordance with the Intercreditor  Agreement
       between the City of Stockton and the Redevelopment  Agency of the City of
       Stockton. Interest is payable to the extent of net cash flow, only to the
       extent that income  exceeds 115% of expenses,  as defined in the note. If
       cash flow is insufficient,  debt service payments are deferred. Principal
       will be  amortized  over a 15 year period  once all  accrued  interest is
       paid. All principal and interest is due November 2033.  Accrued  interest
       is $78,093 at December 31, 2001.
<TABLE>
<CAPTION>
<S>                                                                               <C>                <C>
                                                                                           310,349            310,349
                                                                                  ----------------   ----------------
                                                                                  $      1,753,600   $      1,760,757
                                                                                  ================   ================
</TABLE>

The  aggregate  amounts of  principal  payments  under these  mortgage  notes at
December 31, 2001, are as follows:

             2002                                             $          7,696
             2003                                                        8,270
             2004                                                        8,617
             2005                                                        9,556
             2006                                                       10,273
             Thereafter                                              1,709,188
                                                                ----------------
                                                              $      1,753,600
                                                                ================
The loan agreement with the California  Federal Bank requires the Partnership to
maintain a replacement and general  operating  reserve.  The Partnership did not
generate sufficient cash flow to fund these accounts.

Note 3.     Related Party Transactions / Economic Dependence

The  Partnership   utilizes  management  and  administrative   services  of  CFY
Development,  Inc.  ("CFY"),  which is owned by the  general  partner.  Property
management fees and other overhead  charges payable for the years ended December
31, 2001 and 2000 to CFY were $17,952 and $17,884, respectively. At December 31,
2001,  $219,237 is due to CFY for management fees and operating expenses paid on
behalf of the Partnership.

The Partnership has incurred  operating  deficits and cash flow losses since the
inception of the project. In order to support the Partnership, CFY has agreed to
defer  management  fees and make advances to the  Partnership  when necessary to
facilitate cash flow.  Without the assistance of the general partner or CFY, the
Partnership  would  not be able  to pay its  operating  expenses.  CFY  deferred
$17,952 in management  fees and made $23,300 in cash advances to the Partnership
in 2001,  and  deferred  $17,798  in  management  fees and made  $10,966 in cash
advances to the Partnership in 2000.


                                      -8-