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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Commission file number 33-00152

AMRECORP REALTY FUND III

(Exact name of registrant as specified in its charter)

Texas 75-2045888
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)

2800 N Dallas Pkwy #100, Plano, Texas 75093-5994
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code (972) 836-8000

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

Name of Each Exchange
Title of Each Class on which Registered
None None

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

Limited Partnership Interests
(Title of Class)

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, to the
best of Registrant's knowledge in definitive proxy or information
to Statements incorporated by reference in Part III of the
Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act).

Yes ..... No X.

Documents Incorporated by Reference

The Prospectus dated November 26, 1985 filed pursuant to Rule
424(b) as supplemented pursuant to Rule 424(c) on December 5,
1985.
PART I

Item 1. Business

The Registrant, Amrecorp Realty Fund III, (the
"Partnership"), is a limited partnership organized under the
Texas Uniform Limited Partnership Act pursuant to a Certificate
of Limited Partnership dated August 30, 1985 and amended on
November 21, 1985. On December 31, 2002, the Partnership
consisted of a corporate general partner, LBAL, Inc. (wholly
owned by Robert J. Werra) and 263 limited partners owning 2,382
limited partnership interests at $1,000 per interest. The
distribution of limited partnership interests commenced November
26, 1985 pursuant to a Registration Statement on Form S-11 under
the Securities Act of 1933 (Registration #33-00152) as amended.

The Partnership was organized to acquire a diversified
portfolio of income-producing real properties, primarily
apartments, as well as office buildings, industrial buildings,
and other similar properties

The Partnership intends to continue until December 31, 2015
unless terminated by an earlier sale of its Properties.

Univesco, Inc.("Univesco"), a Texas corporation, controlled
by Robert J. Werra, manages the affairs of the Partnership.
Univesco acts as the managing agent with respect to the
Partnership's Properties. Univesco may also engage other on-site
property managers and other agents, to the extent management
considers appropriate. Univesco and the general partner make all
decisions regarding investments in and disposition of Properties
and has ultimate authority regarding all property management
decisions.

No material expenditure has been made or is anticipated for
either Partnership-sponsored or consumer research and development
activities relating to the development or improvement of
facilities or services provided by the Partnership. There neither
has been, nor are any anticipated, material expenditures required
to comply with any federal, state or local environmental
provisions which would materially affect the earnings or
competitive position of the Partnership.

The Partnership is engaged solely in the business of real
estate investments. Its business is believed by management to
fall entirely within a single industry segment. Management does
not anticipate that there will be any material seasonal affects
upon the operation of the Partnership.


Competition and Other Factors

The majority of the Property's leases are of six to twelve month
terms. Accordingly, operating income is highly susceptible to
varying market conditions. Occupancy and local market rents are
driven by general market conditions which include job creation,
new construction of single and multi-family projects, and
demolition and other reduction in net supply of apartment units.

Rents have generally been increasing in recent years due to the
generally positive relationship between apartment unit supply and
demand in the Partnership's markets. However, the property is
subject to substantial competition from similar and often newer
properties in the vicinity in which they are located. Capitalized
expenditures have increased as units are updated and made more
competitive in the market place.
Item 2. Properties


At December 31, 2002, the Partnership owned Las Brisas Apartment,
a 376-unit apartment community located at 2010 South Clark
Street, Abilene, Taylor County, Texas 79606. The Partnership
purchased a fee simple interest in Las Brisas Apartments on July
30, 1986. The property contains approximately 312,532 net
rentable square feet, one clubhouse, and five laundry facilities
located on approximately 19.11 acres of land.

The property is encumbered by a mortgage note payable in monthly
installments of principal and interest through December 31, 2011,
when a lump-sum payment of approximately $3,447,000 is due. For
information regarding the encumbrances to which the property is
subject and the status of the related mortgage loans, see "
Management`s Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources"
contained in Item 7 hereof and Note B to the Financial Statements
and Schedule Index contained in Item 8.


Occupancy Rates

Percent

1998 1999 2000 2001 2002
Las Brisas 90.7% 95.4% 95.0% 92.7% 93.9%


Item 3. Legal Proceedings


The Partnership is not engaged in any material legal proceedings.


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

There were no matters submitted to a vote of security
holders during the fourth quarter of the fiscal year.

By virtue of its organization as a limited partnership, the
Partnership has outstanding no securities possessing traditional
voting rights. However, as provided and qualified in the Limited
Partnership Agreement, limited partners have voting rights for,
among other things, the removal of the General Partner and
dissolution of the Partnership.
PART II

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

The Partnerships outstanding securities are in the form of
Limited Partnership Interests ("Interests"). As of December 31,
2002 there were approximately 263 limited partners owning 2,382
interests at $1,000 per interest. A public market for trading
Interests has not developed and none is expected to develop. In
addition, transfer of an Interest is restricted pursuant to the
Limited Partnership Agreement.

The General Partner continues to review the Partnership's ability
to make distributions on a quarter-by-quarter basis, however, no
such distributions have been made to the limited partners in
several years and none are anticipated in the immediate future
due to required debt service payments and the existence of the
Special Limited Partner, Mr. Robert J. Werra. The Special
Limited Partner has first right to all net operating cash flow
and net proceeds from disposals of assets to the extent of the
special limited partner distribution preference. During 2002,
2001, and 2000 the Special Limited Partner received distributions
from the Partnership totaling $523,560, $985,408, and $75,000
respectively.

An analysis of tax income or loss allocated and cash distributed
to Investors per $1,000 unit is as follows:



YEARS INCOME GAIN LOSS CASH
DISTRIBUTED
1986 $0 $0 $186 $0
1987 0 0 286 0
1988 0 0 310 0
1989 0 0 278 0
1990 0 0 231 0
1991 0 0 142 0
1992 0 0 0 0
1993 0 153 162 0
1994 24 0 0 0
1995 0 0 5 0
1996 20 0 0 0
1997 0 0 (21) 0
1998 4 0 0 0
1999 72 0 0 0
2000 <1 0 0 0
2001 98 0 0 0
2002 57 0 0 0


Item 6. Selected Financial Data

The following table sets forth selected financial data regarding
the Partnership's results of operations and financial position as
of the dates indicated. This information should be read in
conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in Item
7 hereof and the financial Statements and notes thereto contained
in Item 8.

Year Ended December 31,
( in thousands except unit and per unit amounts)

2002 2001 2000 1999 1998 1997

Limited Partner Units
Outstanding - Basic 2,382 2,382 2,382 2,382 2,382 2,382

Statement of Operations
Total Revenues $1,616 $1,605 $1,591 $1,588 $1,473 $1,430


Net Income (Loss) (64) 86 (23) 143 3 (52)
Limited Partner Net
Income (Loss) per
Unit - Basic (26.62) 35.68 (9.76) 59.65 1.28 (21.49)(a)

Cash Distributions to
Limited Partners per
Unit - Basic 0 0 0 0 0 0


Balance Sheet:
Real Estate, net 3,418 3,576 3,787 3,892 $4,109 $4,254
Total Assets 3,735 4,332 4,123 4,277 4,459 4,567
Mortgages Payable 4,051 4,100 2,874 2,941 3,004 3,061
Partner's Equity (594) (6) 894 992 1,114 1,175



(a) For Federal Income Tax purposes only income was
reallocated in accordance the regulations promulgated
thereunder of the Internal Revenue Code of 1986 as amended.





Item 7. Management Discussion and Analysis of Financial
Conditions and Results of Operations

This discussion should be read in conjunction with Item 6 -
"Selected Financial Data" and Item 8 - "Financial Statements and
Supplemental Information".

Results of Operations: 2002 VERSUS 2001

Revenue from Property Operations increased $11,221 or 0.7%.
Rental income increased $26,016 or 1.75% as compared to 2001.
Other income decreased $14,795 or 12.52% due to lower fee income
from residents. The following table illustrates the increases or
(decreases):


Increase Percent
(Decrease)

Rental income 26,016 1.75%
Fees & Other - -
14,795 12.52%
Net Increase 11,221 0.70%



Property operating expenses for 2002 increased $161,101 or
10.60%. General & administrative increased $79,146 or 78.55%
primarily due to increased insurance costs. Repair and
maintenance expenses increased from 2001 by $25,742 or 18.58%
primarily due to various plumbing and exterior building projects.
Interest expense increased by $25,572 or 11.28% due to the
refinancing in 2001. Payroll increased $16,897 or 6.24% due to
additional maintenance personnel used for the exterior building
maintenance. Utilities decreased $11,008 or 5.19% due to lower
rates. Property management fees are paid to an affiliated entity
and represents 5% of gross operating revenues (see Note 4 to
Financial Statements and Schedule Index contained in Item 8.) The
following table illustrates the increases or (decreases):

Increase Percent
(Decrease)

General and administrative 79,146 78.55%
Repairs and maintenance 25,742 18.58%
Interest 25,572 11.28%
Payroll 16,897 6.24%
Depreciation 20,221 6.03%
Real estate taxes 3,972 2.73%
Property management fees 559 0.70%
Utilities -11,008 -5.19%

Net Increase 161,101 10.60%



Results of Operations: 2001 VERSUS 2000

Revenue from Property Operations increased $14,252 or 0.9%.
Rental income increased $10,132 or 0.69% as compared to 2000.
Other income increased $4,120 or 3.61% due to increased fee
income from residents. The following table illustrates the
increases or (decreases):


Increase
(Decrease)

Rental income 10,132
Other 4,120
Net Increase 14,252



Property operating expenses for 2001 decreased $95,081 or 5.89%.
Repair and maintenance expenses decreased from 2000 by $134,481
or 49.26% primarily due completion of deferred maintenance items
in 2000. Utilities increased $36,416 or 20.71% due to higher
rates. Real estate taxes increased $6,342 or 4.56% due to higher
assessed valuations. Interest expense decreased by $10,101 from
due to normal principal amortization. Property management fees
are paid to an affiliated entity and represents 5% of gross
operating revenues (see Note 4 to Financial Statements and
Schedule Index contained in Item 8.) The following table
illustrates the increases or (decreases):

Increase
(Decrease)

Payroll (4,505)
Utilities 36,416
Real estate taxes 6,342
Repairs and Maintenance (134,481)
General & Administration (3,945)
Interest (10,101)
Depreciation and amortization 14,599
Property management fees 713
Administrative Service Fee (119)

Net Increase (95,081)


Liquidity and Capital Resources

While it is the General Partners primary intention to operate and
manage the existing real estate investment, the General Partner
also continually evaluates this investment in light of current
economic conditions and trends to determine if this asset should
be considered for disposal. At this time, there is no plan to
dispose of Las Brisas Apartments.

As of December 31, 2002, the Partnership had $23,824 in cash and
cash equivalents as compared to $559,647 as of December 31, 2001.
The net decrease in cash of $535,823 is principally due to the
payments made to the special limited partner.

The property is encumbered by a non-recourse mortgage with a
principal balance of $4,051,320 as of December 31, 2002. The
mortgage payable bears interest at 6.18% and is payable in
monthly installments of principal and interest until December
2011 when a lump-sum payment of approximately $3,447,000 is due.
The required principal reductions for the five years ending
December 31, 2006, are $51,775, $55,067, $58,568 $62,292, and
$66,253, respectively.

For the foreseeable future, the Partnership anticipates that
mortgage principal payments (excluding balloon mortgage
payments), improvements and capital expenditures will be funded
by net cash from operations. The primary source of capital to
fund the balloon mortgage payment will be proceeds from the sale,
financing or refinancing of the Property.

The $1,336,517 in Special Limited Partner equity is the result of
previous fundings for operating deficits and other partner loans
made to the Partnership by a related entity. These loans were
reclassified to equity during 1993. The Special Limited Partner
has first right to all net operating cash flows and net proceeds
from disposals of assets to the extent of the Special Limited
Partners distribution preference. During 2002, 2001 and 2000,
the Special Limited Partner received distributions from the
Partnership totaling $523,560, $985,408 and $75,000,
respectively. For further information please see Note G to the
audited financial statements.

Item 7a - Quantitative and Qualitative Disclosure about Market
Risk

Market Risk

The Partnership is exposed to interest rate changes primarily as
a result of its real estate mortgages. The Partnerships interest
rate risk management objective is to limit the impact of interest
rate changes on earnings and cash flows and to lower it's overall
borrowing costs. To achieve its objectives, the Partnership
borrows primarily at fixed rates. The Partnership does not enter
into derivative or interest rate transactions for any purpose.

The Partnerships' activities do not contain material risk due to
changes in general market conditions. The partnership invests
only in fully insured bank certificates of deposits, and mutual
funds investing in United States treasury obligations.

Risk Associated with Forward-Looking Statements Included in this
Form 10-K This Form 10-K contains certain forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934, which are intended to be covered by the safe harbors
created thereby. These statements include the plans and
objectives of management for future operations, including plans
and objectives relating to capital expenditures and
rehabilitation costs on the Properties. The forward-looking
statements included herein are based on current expectations that
involve numerous risks and uncertainties. Assumptions relating
to the foregoing involve judgments with respect to, among other
things, future economic, competitive and market conditions and
future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the
control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could be inaccurate and,
therefore, there can be no assurance that the forward-looking
statements included in this Form 10-K will prove to be accurate.
In light of the significant uncertainties inherent in the forward-
looking statements included herein, the inclusion of such
information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the
Company will be achieved.













AMRECORP REALTY FUND III
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS' REPORTS

December 31, 2002 and 2001

INDEX TO FINANCIAL STATEMENTS



Page

Independent Auditors' Reports 1

Financial Statements

Balance Sheets as of December 31, 2002 and 2001 3

Statements of Operations for the years ended
December 31, 2002, 2001 and 2000 4

Statements of Partners' Equity (Deficit) for the
years ended December 31, 2002, 2001 and 2000 5

Statements of Cash Flows for the years ended
December 31, 2002, 2001 and 2000 6

Notes to Financial Statements 7

Schedule III - Real Estate and Accumulated Depreciation 14



All other schedules have been omitted because they are not
applicable, not required or the information has been supplied
in the financial statements or notes thereto.








INDEPENDENT AUDITORS' REPORT


To the General Partner and Limited Partners of
Amrecorp Realty Fund III

We have audited the accompanying balance sheets of Amrecorp
Realty Fund III, a Texas limited partnership (the "Partnership")
as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity (deficit), and cash flows for the
years ended December 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.

We conducted our audits in accordance with U.S. generally
accepted auditing standards. Those standards require that we
plan and perform the audit 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 presentation of the financial
statements. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the December 31, 2002 and 2001 financial
statements referred to above present fairly, in all material
respects, the financial position of Amrecorp Realty Fund III as
of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years ended December 31, 2002, 2001
and 2000 in conformity with U.S. generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. Schedule III for
the year ended December 31, 2002 is presented for the purpose of
complying with the Securities and Exchange Commission's rules and
is not a required part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion,
fairly states, in all material respects, the financial data
required to be set forth therein in relation to the basic
financial statements taken as a whole.




January 24, 2003
Plano, Texas







AMRECORP REALTY FUND III
BALANCE SHEETS
December 31, 2002 and 2001


ASSETS
2002 2001

Investments in real estate at cost
Land $1,000,000 $1,000,000
Buildings, improvements and furniture
and fixtures 7,044,581 6,856,116

8,044,581 7,856,116
Accumulated depreciation (4,626,464) (4,279,982)

3,418,117 3,576,134

Cash and cash equivalents 23,824 559,647
Escrow deposits 147,989 ---
Capital replacement reserve
284 55,625
Deferred financing costs, net of
accumulated amortization of $10,268
and $1,141, respectively 81,009 90,136
Other assets 63,341 50,466

TOTAL ASSETS 3,734,564 4,332,008


LIABILITIES AND PARTNERS' EQUITY

Mortgage payable 4,051,320 4,100,000
Accrued interest payable 20,864 21,115
Accounts payable 50,616 38,745
Real estate taxes payable 149,534 237
Due to affiliates
263 122,871
Security deposits 55,545 55,018

TOTAL LIABILITIES 4,328,142 4,337,986

PARTNERS' EQUITY (593,578) (5,978)

TOTAL LIABILITIES AND PARTNERS' EQUITY $3,734,564 $4,332,008




AMRECORP REALTY FUND III
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2002, 2001 and 2000

2002 2001 2000

INCOME
Rentals $1,513,085 $1,487,069 $1,476,937
Other 103,387 118,182 114,062

Total income 1,616,472 1,605,251 1,590,999

OPERATING EXPENSES
Depreciation and amortization 355,610 335,389 320,790
Payroll 287,822 270,925 275,430
Interest 252,266 226,694 236,795
Utilities 201,240 212,248 175,832
General and administrative 179,906 100,760 104,705
Repairs and maintenance 164,288 138,546 273,027
Real estate taxes 149,534 145,562 139,220
Property management fee to affiliate 80,822 80,263 79,550
Administrative service fee to affiliate 9,024 9,024 9,143

Total operating expenses 1,680,512 1,519,411 1,614,492

NET INCOME (LOSS) $(64,040) $85,840 $(23,493)

NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT - BASIC $(26.62) $35.68 $(9.76)

LIMITED PARTNERSHIP UNITS
OUTSTANDING - BASIC 2,382 2,382 2,382






AMRECORP REALTY FUND III
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For the Years Ended December 31, 2002, 2001 and 2000


Special
General Limited Limited
Partner Partners Partners Total

Balance, January 1, 2000 $(137,614) $1,315,231 $(185,534) $992,083

Distributions --- (75,000) --- (75,000)

Net loss (235) --- (23,258) (23,493)

Balance, December 31, 2000 (137,849) 1,240,231 (208,792) 893,590

Distributions --- (985,408) --- (985,408)

Net income 858 --- 84,982 85,840

Balance, December 31, 2001 (136,991) 254,823 (123,810) (5,978)

Distributions --- (523,560) --- (523,560)

Net loss (640) --- (63,400) (64,040)

Balance, December 31, 2002 $(137,631) $(268,737 $(187,210) $(593,578)











AMRECORP REALTY FUND III
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2002, 2001 and 2000

2002 2001 2000

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(64,040) $85,840 $(23,493)
Adjustments to reconcile net income
(loss) to net cash provided by
operations:
Depreciation and amortization 355,610 335,389 320,790
Changes in assets and liabilities:
Restricted cash --- 59,000 (7,000)
Escrow deposits (147,989) 138,248 6,118
Other assets (12,875) (35,393) (3,623)
Accrued interest payable (251) 1,596 (459)
Security deposits 527 800 2,776
Accounts payable 11,871 15,361 (9,417)
Due to affiliates (122,608) 3,572 (3,214)
Real estate taxes payable 149,297 (138,983) 21,859

Net cash provided by operating
activities 169,542 465,430 304,337

CASH FLOWS FROM INVESTING ACTIVITIES
Investments in real estate (188,465) (123,273) (215,783)
Capital replacement reserve 55,340 (45,330) 32,633

Net cash used for investing
activities (133,125) (168,603) (183,150)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgages and notes
payable (48,680) (60,718) (67,640)
Proceeds from refinancing --- 1,286,720 ---
Deferred financing costs --- (91,277) ---
Liquidity reserve --- 100,599 (10,096)
Distributions (523,560) (985,408) (75,000)

Net cash provided by (used for)
financing activities (572,240) 249,916 (152,736)

Net increase (decrease) in cash and
cash equivalents (535,823) 546,743 (31,549)

Cash and cash equivalents at beginning
of period 559,647 12,904 44,453

Cash and cash equivalents at end of
period $23,824 $559,647 $12,904

Supplemental disclosure of cash flow
information:

Cash paid during the year for
interest $252,017 $224,849 $237,255

Noncash financing activity :
Refinancing of mortgage payable $ --- $2,813,280 $ ---




AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Amrecorp Realty Fund III (the "Partnership"), a Texas
limited partnership, was formed on August 30, 1985, under
the laws of the state of Texas, for the purpose of
acquiring, maintaining, developing, operating, and selling
buildings and improvements. The Partnership owns and
operates rental apartments in Abilene, Texas. The
Partnership will be terminated by December 31, 2015,
although this date can be extended if certain events occur.
LBAL, Inc., a Texas corporation wholly owned by Mr. Robert
J. Werra, is the general partner. Mr. Werra is the first
special limited partner and third special limited partner.
The second special limited partner is an affiliate of the
general partner.

An aggregate of 25,000 limited partner units at $1,000 per
unit are authorized, of which 2,382 units were outstanding
for each of the three years ended December 31, 2002, 2001
and 2000. Under the terms of the offering, no additional
units will be offered. Effective November 1, 1993, the
partnership agreement was amended to establish a first,
second and third special limited partner status as referred
to above.

Allocation of Net Income (Loss) and Cash

All distributions of net operating cash flow and net
proceeds of the Partnership shall be distributed first to
special limited partners to satisfy the special limited
partner distribution preference, then to repay any
unreturned portion of their contribution. The special
limited partner distribution preference arises from a
preferred return on certain special limited partnership
contributions made in prior years in conjunction with the
refinancing of the mortgage debt. The total unpaid amount
due to the special limited partners at December 31, 2002 is
approximately $2,140,000 of which $800,000 is the remaining
distribution preference and $1,340,000 is the original
contribution. Any additional available cash will then be
distributed in accordance with the partnership agreement.
During 2002, 2001 and 2000, distributions of $523,560,
$985,408, and $75,000, respectively, were made to the
special limited partners in accordance with this agreement.

Net operating income and loss are allocated 1% to general
partners and 99% to limited partners. Net operating cash
flow, as defined in the partnership agreement, shall be
distributed to the limited and general partners first to the
limited partners in an amount equal to a variable
distribution preference on capital contributions for the
current year and then to the extent the preference has not
been satisfied for all preceding years, and, thereafter, 10%
to the general partner and 90% to the limited partners.




AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Net income from the sale of property is allocated first, to
the extent there are cumulative net losses, 1% to the
general partner and 99% to the limited partners; second, to
the limited partners in an amount equal to their
distribution preference as determined on the date of the
partners' entry into the Partnership; and, thereafter, 15%
to the general partner and 85% to the limited partners.

Cash proceeds from the sale of property or refinancing are
allocated first to the limited partners to the extent of
their capital contributions and distribution preference as
determined on the date of the partners' entry into the
Partnership; and, thereafter, 15% to the general partner and
85% to the limited partners.

Basis of Accounting

The Partnership maintains its books on the basis of
accounting used for federal income tax reporting purposes.
Memorandum entries have been made to present the
accompanying financial statements in accordance with U.S.
generally accepted accounting principles.

Investments in Real Estate and Depreciation

Buildings, improvements, and furniture and fixtures are
recorded at cost and depreciated using the straight-line
method over the estimated useful lives of the assets ranging
from 5 to 27.5 years.

Income Taxes

No provision for income taxes has been made since the
partners report their respective share of the results of
operations on their individual income tax return.

Deferred Financing Costs

Costs incurred to obtain mortgage financing are being
amortized over the life of the mortgage using the straight-
line method.


Revenue Recognition


The Partnership has leased substantially all of its rental
apartments under cancelable leases for periods generally
less than one year. Rental revenue is recognized on a
monthly basis as earned.




AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Syndication Costs

Costs or fees incurred to raise capital for the Partnership
are netted against the respective partners' equity accounts.

Cash and Cash Equivalents

The Partnership considers all highly liquid instruments with
a maturity of three months or less to be cash equivalents.

Restricted Cash

Restricted cash consists of tenant security deposits.

Long-Lived Assets

In accordance with Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting For the Impairment
of Long-Lived Assets and For Long-Lived Assets to be
Disposed Of", the Partnership records impairment losses on
long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the
assets' carrying amount. SFAS No. 121 also addresses the
accounting for long-lived assets that are expected to be
disposed of. Based on current estimates, management does
not believe impairment of operating properties is present.

Computation of Earnings Per Unit

The Partnership has adopted Statement of Financial
Accounting Standards ("SFAS") No.128, "Earnings per Share".
Basic earnings per unit is computed by dividing net income
(loss) attributable to the limited partners' interests by
the weighted average number of units outstanding. Earnings
per unit assuming dilution would be computed by dividing net
income (loss) attributable to the limited partners'
interests by the weighted average number of units and
equivalent units outstanding. The Partnership has no
equivalent units outstanding for any period presented.

Segment Information

The Partnership is in one business segment, the real estate
investments business, and follows the requirements of FAS
131, "Disclosures about Segments of an Enterprise and
Related Information."





AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Concentration of Credit Risk

Financial instruments which potentially subject the
Partnership to concentrations of credit risk consist
primarily of cash. The Partnership places its cash with
various financial institutions. The Partnership's exposure
to loss should any of these financial institutions fail
would be limited to any amount in excess of the amount
insured by the Federal Deposit Insurance Corporation and
Securities Investor Protection Corporation. Management does
not believe significant credit risk exists at December 31,
2002.

Use of Estimates

The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during that reporting period. Actual results
could differ from those estimates.

Environmental Remediation Costs

The Partnership accrues for losses associated with
environmental remediation obligations when such losses are
probable and reasonably estimable. Accruals for estimated
losses from environmental remediation obligations generally
are recognized no later than completion of the remedial
feasibility study. Such accruals are adjusted as further
information develops or circumstances change. Costs of
future expenditures for environmental remediation
obligations are not discounted to their present value.
Recoveries of environmental remediation costs from other
parties are recorded as assets when their receipt is deemed
probable. Project management is not aware of any
environmental remediation obligations that would materially
affect the operations, financial position or cash flows of
the Project.

Comprehensive Income

Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income, (SFAS 130), requires that
total comprehensive income be reported in the financial
statements. For the years ended December 31, 2002, 2001 and
2000, the Partnership's comprehensive income (loss) was
equal to its net income (loss) and the Partnership does not
have income meeting the definition of other comprehensive
income.





AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001


NOTE B - MORTGAGE PAYABLE

The mortgage payable of $4,051,320 at December 31, 2002,
bears interest at a rate of 6.18% and is payable in monthly
installments of principal and interest of $25,058 through
December 2011, at which time a lump sum payment of
approximately $3,447,000 is due. This mortgage note is
secured by real estate with a net book value of $3,418,117.

At December 31, 2002, required principal payments due under
the stated terms of the Partnership's mortgage note payable
are as follows:

2003 $51,775
2004 55,067
2005 58,568
2006 62,292
2007 66,253
Thereafter 3,757,365
$4,051,320

NOTE C - RELATED PARTY TRANSACTIONS

The Partnership agreement specifies that certain fees be
paid to the general partner or his designee. An affiliate
of the general partner receives a property management fee
that is approximately 4% of the Partnership's gross
receipts. In addition, a Partnership fee equal to 1% of
gross revenues from operations is to be paid from "Excess
Property Income", as defined in the partnership agreement.

2002 2001 2000
Property management fee $64,659 $64,210 $63,640
Partnership fee 16,163 16,053 15,910

Administrative service fees paid to an affiliate of the
general partner were $9,024, $9,024 and $9,143 for each of
the years ended December 31, 2002, 2001 and 2000,
respectively.

Resulting from the above transactions, amounts due an
affiliate of the general partner as of December 31, 2002,
and 2001, totaled $263 and $122,871, respectively.

NOTE D - COMMITMENTS

The Partnership will pay a real estate commission to the
general partner or his affiliates in an amount not exceeding
the lessor of 50% of the amounts customarily charged by
others rendering similar services or 3% of the gross sales
price of a property sold by the Partnership.




AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001


NOTE E - RECONCILIATION OF BOOK TO TAX LOSS (UNAUDITED)

If the accompanying financial statements had been prepared
in accordance with the accrual income tax basis of
accounting rather than U.S. generally accepted accounting
principals ("GAAP"), the excess of revenues over expenses
for 2002 would have been as follows:



Net income (loss) per accompanying
financial statements $(64,040)

Add - book basis depreciation using
straight-line method 346,482

Deduct - income tax basis depreciation
expense using ACRS method

144,402

Excess of revenues over expenses,
accrual income tax basis $138,040


NOTE F - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The following estimated fair value amounts have been
determined using available market information or other
appropriate valuation methodologies that require
considerable judgement in interpreting market data and
developing estimates. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that
the Partnership could realize in a current market exchange.
The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated
fair value amounts.

The fair value of financial instruments that are short-term
or reprice frequently and have a history of negligible
credit losses is considered to approximate their carrying
value. These include cash and cash equivalents, accounts
payable and other liabilities.

Management has reviewed the carrying values of its mortgages
payable and notes payable to related parties in connection
with interest rates currently available to the Partnership
for borrowings with similar characteristics and maturities
and has determined that their estimated fair value would
approximate their carrying value as of December 31, 2002 and
2001.

The fair value information presented herein is based on
pertinent information available to management. Although
management is not aware of any factors that would
significantly affect the estimated fair value amounts, such
amounts have not been comprehensively revalued for purposes
of these financial statements since that date, and
therefore, current estimates of fair value may differ
significantly from the amounts presented herein.





AMRECORP REALTY FUND III
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2002

Initial Cost
to Partnership

Description Encumbrances Land Building Total Cost
and Subsequent
Improvements to Acquisition


Twenty-eight
two-story
apartment
buildings of
concrete
block
construction
with brick
stucco and
wood siding
exterior, and
composition
shingled
roofs located
in Abilene,
Texas (b) 1,000,000 5,721,811 1,322,770


Gross Amounts at Which
Carried at Close of Year

Buildings
And Accumulated
Description Land Improvements Total Depreciation
(c)(d) (c)

Twenty-eight
two-story
apartment
buildings of
concrete
block
construction
with brick
veneer,
stucco and
wood siding
exterior, and
composition
shingled
roofs located
in Abilene,
Texas $1,000,000 7,044,581 8,044,581 4,626,464


Life on Which
Date of Date Depreciation
Description Construction Acquired is Computed


Twenty-eight
two-story
apartment
buildings of
concrete
block
construction
with brick
veneer,
stucco and
wood siding
exterior, and
composition
shingled
roofs located
in Abilene, Complete at
Texas Date Acquired 7/31/86 (a)

See notes to Schedule III.





AMRECORP REALTY FUND III
Schedule III - Real Estate and Accumulated Depreciation (Continued)
December 31, 2002


NOTES TO SCHEDULE III:

(a) See Note A to financial statements outlining depreciation methods and
lives.

(b) See description of mortgages and notes payable in Note B to the
financial statements.

(c) The reconciliation of investments in real estate and accumulated
depreciation for the years ended December 31, 2002, 2001 and 2000
is as follows:

Investments in Accumulated
Real Estate Depreciation

Balance, January 1, 2000 $7,517,060 $3,624,944

Acquisitions 215,783 ---
Depreciation expense --- 320,790

Balance, December 31, 2000 $7,732,843 $3,945,734

Acquisitions 123,273 ---
Depreciation expense --- 334,248

Balance, December 31, 2001 7,856,116 4,279,982

Acquisitions 188,465 ---
Depreciation expense --- 346,482

Balance, December 31, 2002 $8,044,581 $4,626,464


(d) Aggregate cost for federal income tax purposes is $6,555,434.




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


On November 6, 1998, an 8-K was filed to disclose the change in
auditors. No financial statements were issued in conjunction with this
filing. The Registrant has not been involved in any disagreements on
accounting and financial disclosure.

PART III

Item 10. Directors and Executive Officer of the Partnership

The Partnership itself has no officers or directors. LBAL, Inc., a
Texas Corporation, which is wholly owned by Robert J. Werra, is the
General Partner of the Partnership.

Robert J. Werra, 64, joined Loewi & Co., Incorporated ("Loewi") in
1967 as a Registered Representative. In 1971, he formed the Loewi real
estate department, and was responsible for its first sales of privately
placed real estate programs. Loewi Realty was incorporated in 1974, as a
wholly owned subsidiary of Loewi & Co., with Mr. Werra as President. In
1980, Mr. Werra, along with three other individuals, formed Amrecorp Inc.
to purchase the stock of Loewi Real Estate Inc., and Loewi Realty. In
1991 Univesco, Inc. became the management agent for the Partnership.
Limited Partners have no right to participate in management of
Partnership.

Item 11. Management Remuneration and Transactions

As stated above, the Partnership has no officers or directors.
Pursuant to the terms of the Limited Partnership Agreement, the General
Partner receives 1% of Partnership income and loss and up to 15% of Net
Proceeds received from sale or refinancing of Partnership properties
(after return of Limited Partner capital contributions and payment of a 6%
Current Distribution Preference thereon).

Univesco, Inc., an affiliate of the General Partner, is entitled to
receive a management fee with respect to the properties actually managed
of 5% of actual gross receipts from a property or an amount competitive in
price or terms for comparable services available from a non-affiliated
persons. The Partnership is also permitted to engage in various
transactions involving affiliates of the General Partner as described
under the caption "Compensation and Fees" at pages 6-8, "Management" at
pages 18-20 and "Allocation of Net Income and Losses and Cash
Distributions" at pages 49-51 of the Prospectus as supplemented,
incorporated in the Form S-11 Registration Statement which was filed with
the Securities and Exchange Commission and made effective on November 26,
1985.

For the Fiscal year ended December 31, 2002, 2001, and 2000, property
management fees earned totaled $80,822, $80,263, and $79,550,
respectively. An additional administration service fee was paid to the
general partner of $9,024, $9,143, and 9,024 for the years ended December
31, 2002, 2001, and 2000, respectively.


Item 12. Security Ownership of Certain Beneficial Owners and Management

(a)

Title of Class Name and Address Amount and Nature Percent of

Limited William E. Kreger 300 units 12.59%
Partnership 3301 Biddle Ave. #1101
Interest Wyandette, MI 48192

Juanita L. Werra 127 units 5.33%
5881 Prestonview Blvd.
#143
Dallas, TX 75243

Monty L. Parker 127 units 5.33%
9144 North Silver Brook Lane
Brown Deer, WI 53223

(b) By virtue of its organization as a limited partnership, the
Partnership has no officers or directors. Persons performing functions
similar to those of officers and directors of the Partnership,
beneficially own, the following units of the Partnership as of March 1,
2002.

Title of Name and Address Amount and Nature Percent of
Class of Beneficial Owner of Beneficial Ownership Class

Limited Robert J. Werra 10 units .42%
Partnership 6210 Campbell Road,
Interest Suite 140
Dallas, TX 75248

(c) There is no arrangement, known to the Partnership, which may, at a
subsequent date, result in a change in control of the Partnership.

Item 13. Certain Relations and Related Transactions

As stated in item 11, the Partnership has no officers or directors.
Pursuant to the terms of the Limited Partnership Agreement, the general
partner receives 1% of partnership income and loss and up to 15%of Net
Proceeds received from the sale or refinancing of Partnership Properties
(after return of Limited Partner capital contributions and payment of a
Current Distribution Preference thereon).

Univesco, Inc. (an affiliate of the General Partner), is entitled to
receive a management fee with respect to the Properties. For residential
Properties (including all leasing and releasing fees and fees for leasing-
related services), the lesser of 5% of gross receipts of the Partnership
from such Properties or an amount which is competitive in price and terms
with other non-affiliated persons rendering comparable services which
could reasonably be made available to the Partnership. The Partnership is
also permitted to engage in various transactions involving affiliates of
the general partner as described under the caption "Compensation and Fees"
at pages 6-8, "Management" at pages 18-20 and "Allocation of Net Income
and Losses and Cash Distributions" at pages 49-51 of the definitive
Prospectus, incorporated in the form S-11 Registration Statement which was
filed with the Securities and Exchange Commission and made effective of
November 26, 1985 and incorporated herein by reference.

Item 14. Controls and Procedures
Based on their most recent evaluation, which was completed within 90 days
of the filing of this Form 10-K, our Principal Financial Officer and
Principal Executive Officer, believe our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are
effective. There were not any significant changes in internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation, and there has not been any corrective
action with regard to significant deficiencies and material weaknesses.

PART IV

Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 10-
K

(A) 1. Financial Statements

The financial statements of Amrecorp Realty Fund III are
included in Part II, Item 8.

2. Financial Statements and Schedules

All schedules for which provision is made is the applicable
accounting regulations of the Securities and Exchange
Commission are not required under the related instructions,
are inapplicable, or the information is presented in the
financial statements or related notes, and therefore have
been omitted.

3. Exhibits

None.

(B) Reports on Form 8-K for the quarter ended December 31, 2002.

None.

(C) Exhibits

3. Certificate of Limited Partnership, incorporated by
reference to Registration Statement No. 33-00152 effective
November 26, 1985

4. Limited Partnership Agreement, incorporated by reference to
Registration Statement N. 33-00152 effective November 26, 1985.

9. Not Applicable.
10. None.
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.
18. Not Applicable.
19. Not Applicable.
22. Not Applicable.
23. Not Applicable.
24. Not Applicable.
25. Power of Attorney, incorporated by reference to Registration
Statement No.
33-00152 effective November 26, 1985.
28. None.

(d) Financial Statement Schedules excluded from the annual report
None

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.

AMRECORP REALTY FUND III

LBAL, Ltd., General Partner


By: /s/ Robert J. Werra
Robert J. Werra, President

March 21, 2003
CERTIFICATION

I, Robert J Werra, certify that:
1. I have reviewed this annual report on Form 10-K of Amrecorp Realty Fund
III;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.


Date: March 21, 2003
/s/ Robert J. Werra
General Partner


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

In connection with the Annual Report of Amrecorp Realty Fund III ("the
Company") on Form 10-K for the year ending December 31, 2002 as filed
with the Securities and Exchange Commission on the date hereof ("the
Report"), I, Robert J. Werra, Acting Principal Executive Officer and
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002,
that:

(1) The report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended;
and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.



/s/ Robert J. Werra

Acting Principal Executive Officer and Chief Financial Officer
March 21, 2003