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 December 31, 1998

                                       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.

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

California                                                   33-0563307

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

                                 (714) 662-5565

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

Title of Securities                               Exchanges on which Registered

NONE                                              NOT APPLICABLE



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

UNITS OF PARTNERSHIP INTEREST

<PAGE>


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

         Indicate by check mark 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



                       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 report 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




<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  local   limited   partnerships   ("Local   Limited
Partnerships")  which own multifamily  apartment complexes that are eligible for
Federal and (in some cases)  California  low-income Low Income  Housing  Credits
(the "Low Income Housing Credit").

The general  partner of the  Partnership  is WNC Tax Credits  Partners III, L.P.
(the "General  Partner" or "TCP III").  The general  partner of TCP III is WNC &
Associates,  Inc.  ("Associates").  The business of the Partnership is conducted
primarily  through  Associates  as  neither  TCP  III nor  the  Partnership  has
employees of its own.

On February  17, 1993,  the  Partnership  commenced a public  offering of 30,000
Units of Limited Partnership Interests ("Units"), at a price of $1,000 per Unit.
The Partnership  closed its Offering July 22, 1994, with a total of 18,000 Units
representing  $18,000,000  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  in  Local  Limited
Partnerships each of which will own and operate an apartment complex ("Apartment
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  against  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  Apartment  Complex  is
subject to a fifteen-year compliance period (the "Compliance Period").

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 a Local Limited  Partnership of any Apartment Complex prior to the end of the
applicable 15 year Compliance Period. Because of (i) the nature of the Apartment
Complexes,  (ii) the  difficulty of predicting  the resale market for low-income
housing  15 or  more  year  in  the  future,  and  (iii)  the  inability  of the
Partnership  to directly  cause the sale of  Apartment  Complexes by the general
partners  of  the  respective   Local  Limited   Partnerships   ("Local  General
Partners"),  but generally  only to require such Local  General  Partners to use
their  respective best efforts to find a purchaser for the Apartment  Complexes,
it is  not  possible  at  this  time  to  predict  whether  the  liquidation  of
substantially  all  of the  Partnership's  assets  and  the  disposition  of the
proceeds,  if any, in accordance with the Partnership  Agreement will be able to
be accomplished promptly at the end of the Compliance Period. If a Local Limited
Partnership is unable to sell an Apartment  Complex,  it is anticipated that the
Local General Partner will either continue to operate such Apartment  Complex or

                                       1
<PAGE>

take such other actions as the Local General Partner  believes to be in the best
interest of the Local Limited Partnership. In addition, circumstances beyond the
control of the General  Partner may occur  during the  Compliance  Period  which
would require the Partnership to approve the disposition of an Apartment Complex
prior to the end thereof.

As of  December  31,  1998,  CHTC III had  invested in  eighteen  Local  Limited
Partnerships. Each of these Local Limited Partnerships owns an Apartment Complex
that is or is expected to be eligible for the Low Income Housing Credit.  All of
the Local  Limited  Partnerships  also benefit or will  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 multifamily  residential real estate.  Some of these
risks are that the Low Income Housing Credit could be recaptured and neither the
Partnership's  investments  nor the Apartment  Complexes  owned by Local Limited
Partnerships will be readily marketable. Additionally, there can be no assurance
that the  Partnership  will be able to dispose of its interests in Local Limited
Partnerships at the end of the Compliance Period. 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  Apartment
Complexes and the Partnership.  The Apartment Complexes could be subject to loss
through foreclosure.  In addition,  each Local Limited Partnership is subject to
risks relating to environmental hazards which might be uninsurable.  Because the
Partnership's  ability to control its operations  will depend on these and other
factors  beyond the control of the General  Partner and the general  partners of
the Local  Limited  Partnerships,  there can be no  assurance  that  Partnership
operations will be profitable or that the anticipated Low Income Housing Credits
will be available to Limited Partners.

As of December 31, 1998, the eighteen  Apartment  Complexes acquired by CHTC III
were completed and in operation,  the final one completed construction in May of
1995. The Apartment  Complexes owned by the Local Limited  Partnerships in which
CHTC III has invested were developed by the Local General  Partners who acquired
the sites and applied for applicable  mortgages and  subsidies.  CHTC III became
the principal  limited partner in these Local Limited  Partnerships  pursuant to
arm's-length negotiations with the Local General Partners. As a limited partner,
CHTC III's liability for obligations of the Local Limited Partnership is limited
to its investment.  The Local General  Partner of the Local Limited  Partnership
retains responsibility for developing, constructing,  maintaining, operating and
managing the Apartment Complex.

                                       2
<PAGE>

The  following  is a schedule  of the status as of  December  31,  1998,  of the
Apartment  Complexes owned by Local Partnerships in which CHTC III was a limited
partner as of December 31, 1998.

            SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                       IN WHICH CHTC III HAS AN INVESTMENT
                             AS OF DECEMBER 31, 1998

                                   Total           Units          Percentage of
                                   Units        Occupied            Total Units
                                                                       Occupied
Name & Location

Almond Garden                        34                  32                 94%
  Delhi, California
Almond View                          72                  70                 97%
  Stockton, California
Buccaneer                            48                  45                 94%
  Fernandia Beach, Florida
Candleridge - Perry II               24                  24                100%
  Perry, Iowa
Colonial Village                     56                  48                 86%
  Roseville, California
Dallas County Housing                19                  19                100%
  Dallas, North Carolina
La Paloma del Sol                    38                  36                 94%
  Deming, New Mexico
Memory Lane                          18                  18                100%
  Yankton, South Dakota
Neuva Sierra Vista                   35                  32                 91%
  Richgrove, California
Old Fort                             40                  39                 97%
  Hidalgo, Texas
Orosi                                42                  42                100%
  Orosi, California
Parlier Garden                       41                  41                100%
  Parlier, California
Rosewood Housing                     20                  15                 75%
  Superior, Wisconsin
Sun Manor                            36                  35                 97%
  Itta Bena, Mississippi
Tahoe Pines                          28                  28                100%
  South Lake Tahoe, California
Venus Retirement                     24                  23                 96%
  Venus, Texas
Walnut Pixlie                        22                  22                100%
  Orange, California
Winters Seniors                      38                  38                100%
  Winters, California

                                     635                607                 96%
                                     ===                ===                 ===


                                       3

<PAGE>
Item 2.  Properties

Through its investment in Local Limited Partnerships CHTC III holds interests in
Apartment  Complexes.  See Item 1 for information  pertaining to these Apartment
Complexes.

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.  Units  can  be  assigned  only  if  certain
requirements in the Partnership's Agreement of Limited Partnership ("Partnership
Agreement") are satisfied.

(b) At December 31, 1998, there were 962 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.  The Limited  Partners  received Low
Income Housing Credits per Unit as follows


                                       1998          1997           1996
                                       ----          ----           ----
                                     
       Federal                         $113          $113           $113
       California                        17            85             85
                                     ------        ------         ------
                                       $179          $198           $179
                                     ======        ======         ======

Item 6.  Selected Financial Data

         OMITTED.
         Note  to  Reader.  Some  of  the  limited  partnerships  in  which  the
         Partnership has investments have yet to provide final audited financial
         statements  and other  information  as required  under the terms of the
         respective partnership agreements.  That information is critical to the
         completion of the  Partnership's  required  disclosures  in this Annual
         Report on Form 10K,  including  information on the underlying  property
         investments,   the  Partnership's  financial  statements  and  required
         supplementary  schedules.  Every  effort is being  made to obtain  this
         information and the registrant will file an amended Form 10K as quickly
         as possible.

                                       4
<PAGE>
Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operation

         See the Note to Reader in Part II, Item 6.


Impact of Year 2000

The General  Partner has assessed the  Partnership's  exposure to date sensitive
computer  systems that may not be operative  subsequent  to 1999. As a result of
this  assessment,  the  General  Partner  has  executed a plan to  minimize  the
Partnership's  exposure to financial loss and/or  disruption of normal  business
operations  that may  occur  as a result  of Year  2000  non-compliant  computer
systems.

Business Computer Systems

These systems include both computer hardware and software  applications relating
to operations such as financial reporting. The Partnership does not maintain its
own systems and thus utilizes the computer systems of the General  Partner.  The
General Partner  developed a compliance  plan for each of its business  computer
systems,  with  particular  attention  given to  critical  systems.  The General
Partner  contracted  with an outside  vendor to  evaluate,  test and repair such
systems.  The assessment  consisted of determining the compliance with Year 2000
of critical  computer hardware and software.  Incidences of non-compliance  were
found with respect to computer  software  applications  and were corrected.  The
vendor found no instances of non-compliance with respect to computer hardware.

The Local General  Partners and/or property  management  companies  maintain the
business  computer  systems that relate to the  operations  of the Local Limited
Partnerships.  The  General  Partner is in the  process of  obtaining  completed
questionnaires   from  such  Local  General  Partners  and  property  management
companies to assess their  respective Year 2000  readiness.  The General Partner
intends to  identify  those  Local  General  Partners  and  property  management
companies  that have systems  critical to the  operations  of the Local  Limited
Partnerships that are not Year 2000 compliant.  For those Local General Partners
and property  management  companies which have business  computer  systems which
will not be Year 2000 compliant prior to December 31, 1999 and where the lack of
such  compliance  is  determined  to have a  potential  material  effect  on the
Partnership's financial condition and results of operations, the General Partner
intends  to  develop  contingency  plans  which may  include  changing  property
management companies.

Outside Vendors

The General  Partner has obtained  assurances  from its  suppliers of electrical
power and banking and telecommunication services that their critical systems are
all Year 2000 compliant.  There exists,  however,  inherent uncertainty that all
systems of outside vendors or other third parties on which the General  Partner,
and thus the Partnership, and the Local General Partners and property management
companies,  and thus the  Local  Limited  Partnerships,  rely  will be Year 2000
compliant. Therefore, the Partnership remains susceptible to the consequences of
third party critical computer systems being non-compliant.

Personal Computers

The General  Partner has  determined  that its  personal  computers  and related
software critical to the operations of the Partnership are Year 2000 compliant.


                                       5
<PAGE>
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         NONE.

Item 8.  Financial Statements and Supplementary Data

         OMITTED.
         See the Note to Reader in Part II, Item 6.

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

          (a)(1) (i) On December 16, 1998,  Corbin & Wertz,  Irvine,  California
          was dismissed as the Partnership's principal independent accountant.

               (ii) The  reports  of  Corbin & Wertz  respecting  the  financial
          statements of the  Partnership did not contain an adverse opinion or a
          disclaimer of opinion, nor were any such reports qualified or modified
          as to uncertainty,  audit scope, or accounting  principles,  as of and
          for the years ended December 31, 1997 and 1996.

               (iii) The  decision  to change  accountants  was  approved by the
          board of directors of the General Partner.

               (iv)  During the last two  fiscal  years and  subsequent  interim
          period of the Partnership there were no disagreements between Corbin &
          Wertz and the  Partnership  on any matter of accounting  principles or
          practices,  financial  statement  disclosure,  or  auditing  scope  or
          procedure of the nature described in Item  304(a)(1)(iv) of Securities
          and Exchange Commission Regulation S-K.

               (v)  During  the last two  fiscal  years and  subsequent  interim
          period  of the  Partnership  there  were no  reportable  events of the
          nature  described  in Item  304(a)(1)(v)  of  Securities  and Exchange
          Commission Regulation S-K.

          (a)(2) On February 3, 1999, BDO Seidman,  LLP, Costa Mesa,  California
          was engaged as the  Partnership's  principal  independent  accountant.
          During the last two fiscal years and subsequent  interim period of the
          Partnership,   the  Partnership  did  not  consult  BDO  Seidman,  LLP
          regarding (i) either,  the  application of accounting  principles to a
          specified  transaction;  or the type of audit  opinion  that  might be
          rendered on the Partnership's financial statements, or (ii) any matter
          that  was  the  subject  of  a   disagreement   (as  defined  in  Item
          304(a)(1)(iv) of Securities and Exchange Commission Regulation S-K) or
          was a reportable event (as defined in Item  304(a)(1)(v) of Securities
          and Exchange Commission Regulation S-K).

                                       6
<PAGE>

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. are Wilfred N. Cooper, Sr. and John B. Lester, Jr.

     Wilfred N. Cooper, Sr., age 68, is the founder, Chief Executive Officer 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.

     John B. Lester,  Jr., age 65, is  President,  a Director,  Secretary  and a
member of the Acquisition Committee of WNC & Associates, Inc., and a Director of
WNC Capital  Corporation.  Mr. Lester has 27 years of experience in  engineering
and construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, he was Chairman of
the Board and Vice President or President of E & L Associates,  Inc., a provider
of engineering and construction  services to the oil refinery and  petrochemical
industries which he co-founded in 1973. Mr. Lester graduated from the University
of Southern  California in 1956 with a Bachelor of Science  degree in Mechanical
Engineering.

     Wilfred N. Cooper, Jr., age 36, is Executive Vice President, 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.

                                       7
<PAGE>
     David N.  Shafer,  age 46, is Senior 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.

     Michael L. Dickenson,  age 42, is Vice President - Finance, Chief Financial
Officer and a member of the Acquisition Committee of WNC & Associates,  Inc. and
Chief  Financial  Officer of WNC  Management,  Inc.  He has been  involved  with
acquisition  and investment  activities  with respect to real estate since 1985.
Prior to joining  the Sponsor in March 1999,  he was the  Director of  Financial
Reporting at  TrizecHahn  Centers  Inc., a developer  and operator of commercial
real estate, from 1995 to 1999, a Senior Manager with E&Y Kenneth Leventhal Real
Estate  Group,  Ernst & Young,  LLP,  from 1988 to 1995,  and Vice  President of
Finance with Great Southwest Companies, a commercial and residential real estate
developer,  from  1985 to  1988.  Mr.  Dickenson  is a member  of the  Financial
Accounting  Standards  Committee  for the  National  Association  of Real Estate
Companies  and the American  Institute of Certified  Public  Accountants,  and a
Director of HomeAid Southern California,  a charitable  organization  affiliated
with the building industry. He graduated from Texas Tech University in 1978 with
a Bachelor of Business  Administration - Accounting  degree,  and is a Certified
Public Accountant.

     Thomas J. Riha, age 44, is 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  53,  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 by 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.

     N.  Paul  Buckland,  age 36,  is Vice  President  -  Acquisitions  of WNC &
Associates,   Inc.  He  has  been  involved  in  real  estate  acquisitions  and
investments  since 1986 and has been employed with WNC & Associates,  Inc. since
1994.  Prior to that, he served on the development team of the Bixby Ranch which
constructed  apartment  units  and  Class  A  office  space  in  California  and
neighboring states, and as a land acquisition  coordinator with Lincoln Property
Company where he identified and analyzed multi-family developments. Mr. Buckland
graduated from California State University, Fullerton in 1992 with a Bachelor of
Science degree in Business Finance.
                                       8
<PAGE>

     David Turek,  age 44, 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 62, 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.,  the mother of Wilfred  N.  Cooper,  Jr. and the sister of John B.
Lester,  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 for the following fees:

(a) Organization and Offering Expenses. The Partnership paid the General Partner
or its affiliates as of December 31, 1998 $2,366,564,  consisting of commissions
and other fees and expenses of the Partnership's offering of Units of $1,440,000
and  $926,564,  respectively.  Of the total paid to the  General  Partner or its
affiliates, all of the amount of $2,366,564 was paid (reallowed) to unaffiliated
persons participating in the Partnership's  offering or rendering other services
in connection with the Partnership's offering.

(b)  Acquisition  fees in an  amount  equal to 9% of the gross  proceeds  of the
Partnership's  offering  ("Gross  Proceeds").  Through  December 31,  1998,  the
aggregate  amount of acquisition fees of $1,620,000 have been paid or are due to
the General Partner or its affiliates.

(c) The  Partnership  reimbursed  the General  Partner or its  affiliates  as of
December 31, 1998 for acquisition expenses which have not exceeded 1.5% of Gross
Proceeds,  expended by such persons on behalf of the  Partnership in the amounts
of approximately $194,000.

(d) An annual asset management fee in an amount equal to 0.5% of invested assets
(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  Apartment  Complexes  owned by such Local  Limited
Partnerships.).  Fees of $186,166, $186,166 and $186,422 were incurred for 1998,
1997, and 1996,  respectively.  The Partnership  paid the General Partner or its
affiliates  $0,  $50,000  and  $200,000  of  those  fees in 1998 , 1997 and 1996
respectively. (e) A subordinated disposition fee in an amount equal to 1% of the
sale price  received in connection  with the sale or disposition of an Apartment
Complex or Local Limited  Partnership  Interest.  Subordinated  disposition fees
will be  subordinated  to the prior  return  of the  Limited  Partners'  capital
contributions  and payment of the Return on Investment to the Limited  Partners.
"Return on Investment" means an annual, cumulative but not compounded,  "return"
to the Limited  Partners  (including Low Income  Housing  Credits) as a class on
their adjusted capital contributions  commencing for each Limited Partner on the
last day of the  calendar  quarter  during which the Limited  Partner's  capital
contribution is received by the Partnership,  calculated at the following rates:
(i)  16%  through  December  31,  2003,  and  (ii)  6% for  the  balance  of the
Partnerships term. No disposition fees have been paid.

                                       9
<PAGE>

(f) The General Partner was allocated federal and California Housing Tax Credits
as follows:

                                     1998             1997               1996
                                     ----             ----               ----

       Federal                    $20,481          $20,481            $20,481
       California                   3,125           11,975             15,391
                                   ------           ------             ------
               Total              $23,606          $32,456            $35,872
                                   ======           ======             ======

Item 12.  Security Ownership of Certain Beneficial Owners and Management

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.

Security Ownership of Management

(a)  Security Ownership of Certain Beneficial Owners

No  person  is known to own  beneficially  in  excess  of 5% of the  outstanding
Limited Partnership Interests.

(b)  Security Ownership of Management

 Neither  the  General  Partner,  its  affiliates  nor  any of the  officers  or
directors of  Associates  or its  affiliates  own directly or  beneficially  any
limited partnership interests in the Partnership.

(c)  Changes in Control

The management and control of the General Partners may be changed at any time in
accordance with their respective 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 anytime remove the General
Partner of the Partnership and elect a successor General Partner

Item 13.  Certain Relationships and Related Transactions

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

                                       10
<PAGE>

PART IV.

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

Financial Statements:

         OMITTED
         See the Note to Reader in Part II, Item 6.

Exhibits
(3): Articles of incorporation and by-laws:  The registrant is not incorporated.
The Partnership  Agreement is included as Exhibit B to the Prospectus,  filed as
Exhibit 28.1 to Form 10 K for the year ended December 31, 1994.

(10) Material contracts:

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.

                                       11
<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.

Reports on Form 8-K

Form 8K Current Report was filed December 22, 1998

<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/ John B. Lester, Jr.
-----------------------------------------------------
John B. Lester, Jr.        
President of WNC & Associates, Inc.

Date: April 14, 1999


By:  /s/ Michael L. Dickenson
-----------------------------------------------------
Michael L. Dickenson       
Vice-President - Chief Financial Officer of WNC & Associates, Inc.

Date: April 14, 1999


         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.     
Director and Chairman of the Board    WNC & Associates, Inc.

Date: April 14, 1999


By:  /s/ John B. Lester, Jr.
-----------------------------------------------------
John B. Lester, Jr.        
Director and Secretary of the Board   WNC & Associates, Inc.

Date: April 14, 1999


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

Date: April 14, 1999