WNC HOUSING TAX CREDIT FUND IV L P SERIES 2 - 10-K Annual Report

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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the fiscal year ended March 31, 2000

OR

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

For the transition period from __________ to __________

Commission file number: 0-28370

WNC HOUSING TAX CREDIT FUND IV, L.P. - Series 2

California 33-0596399
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)

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

(714) 662-5565

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

NONE

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

UNITS OF LIMITED PARTNERSHIP INTEREST

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

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

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

INAPPLICABLE

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual 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

2

PART I.

Item 1. Business

Organization

WNC Housing Tax Credit Fund IV, L.P., Series 2 (the "Partnership") is a
California Limited Partnership formed under the laws of the State of California
on September 27, 1993. The Partnership was formed to acquire limited partnership
interests in other limited partnerships or limited liability companies ("Local
Limited Partnerships") which own multifamily housing complexes that are eligible
for low-income housing federal and, in some cases, California income tax credits
(the "Low Income Housing Credit").

The general partner of the Partnership is WNC Tax Credit Partners IV, L.P. (the
"General Partner"). The general partner of the General Partner is WNC &
Associates, Inc. ("Associates"). Wilfred N. Cooper, Sr., through the Cooper
Revocable Trust, owns 66.8% of the outstanding stock of Associates. John B.
Lester, Jr. was the original limited partner of the Partnership and owns,
through the Lester Family Trust, 28.6% of the outstanding stock of Associates.
Wilfred N. Cooper, Jr., President of Associates, owns 2.1% of the outstanding
stock of Associates. The business of the Partnership is conducted primarily
through the general partner, as the Partnership has no employees of its own.

Pursuant to a registration statement filed with the Securities and Exchange
Commission on October 20, 1993, in July 1994 the Partnership commenced a public
offering of 20,000 Units of Limited Partnership Interests ("Units"), at a price
of $1,000 per Unit. As of the close of the public offering in July 1995, a total
of 15,600 Units representing approximately $15,241,000 had been sold. Holders of
Limited Partnership Interests are referred to herein as "Limited Partners."

Sempra Energy Financial, a California corporation, which is not an affiliate of
the Partnership or General Partner, has purchased 4,000 Units, which represents
25.6% of the Units outstanding for the Partnership. Sempra Energy Financial
invested $3,641,000. A discount of $359,000 was allowed due to a volume
discount. See Item 12(a) in this 10-K.

Description of Business

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

In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended by Supplements to the Prospectus thereto (the
"Partnership Agreement"), will be able to be accomplished promptly at the end of
the 15-year period. If a Local Limited Partnership is unable to sell its Housing
Complex, it is anticipated that the local general partner ("Local General
Partner") will either continue to operate such Housing Complex or take such
other actions as the Local General Partner believes to be in the best interest

3

of the Local Limited Partnership. Notwithstanding the preceding, circumstances
beyond the control of the General Partner or the Local General Partners may
occur during the Compliance Period, which would require the Partnership to
approve the disposition of a Housing Complex prior to the end thereof, possibly
resulting in recapture of Low Income Housing Credits.

As of March 31, 2000, the Partnership had invested in twenty-two Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex
that is eligible for the federal Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.

The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness. If a Local Limited Partnership does not makes its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local Limited Partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that the anticipated Low Income
Housing Credits will be available to Limited Partners.

In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.

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

Item 2. Properties

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

4

----------------------------- --------------------------------------------
As of March 31, 2000 As of December 31, 1999
----------------------------- --------------------------------------------
Partnership's Encumbrances
Total Investment Amount of Estimated Low of Local
General Partner in Local Limited Investment Number Occu- Income Housing Limited
Partnership Name Location Name Partnerships Paid to Date of Units pancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Apartment Developers
East Brewton, Ltd. Brewton, Inc. and Thomas H.
Alabama Cooksey $ 1,920,000 $ 1,192,000 40 98% 1,863,000 $ 1,150,000

Autumn Trace Silsbee, Olsen Securities Corp. 412,000 412,000 58 90% $ 714,000 1,261,000
Associates, Ltd. Texas

Broken Bow Apartments Broken Bow, Retro Development,
I, Limited Partnership Nebraska Inc. 608,000 608,000 16 75% 1,127,000 750,000

Candleridge Apartments Waukee, Eric A. Sheldahl 125,000 125,000 23 100% 230,000 682,000
of Waukee L.P. II Iowa

Chadwick Limited Edan, North Boyd Management, Inc.
Partnership Carolina Gordon L. Blackwell
and Regency
Investment Associates 378,000 378,000 48 100% 735,000 1,561,000

Comanche Retirement Comanche, Max L. Rightmer 136,000 136,000 22 100% 265,000 592,000
Village, Ltd. Texas

Crossings II Limited Portage, Raymond T. Cato, Jr. 432,000 432,000 114 90% 739,000 5,992,000
Dividend Housing Michigan
Association Limited
Partnership

EW, a Wisconsin Evansville, Philip Wallis, James
Limited Partnership Wisconson Poehlman, Cynthia
Solfest Wallis, and
Anita Poehlman 164,000 164,000 16 50% 306,000 619,000

5

----------------------------- --------------------------------------------
As of March 31, 2000 As of December 31, 1999
----------------------------- --------------------------------------------
Partnership's Encumbrances
Total Investment Amount of Estimated Low of Local
General Partner in Local Limited Investment Number Occu- Income Housing Limited
Partnership Name Location Name Partnerships Paid to Date of Units pancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------

Garland Street Limited Malvarn, Conrad L. Beggs,
Partnership Arkansas Audrey D. Beggs,
Russell J. Altizer,
and Marjorie L. Beggs 164,000 164,000 18 100% 319,000 696,000

Hereford Seniors Hereford, Winston Sullivan 167,000 167,000 28 96% 330,000 802,000
Community, Ltd. Texas

Hickory Lane Newton, Olsen Securities Corp. 174,000 174,000 24 92% 320,000 596,000
Associates, Ltd Texas

Honeysuckle Court Vidor, Olsen Securities Corp 339,000 339,000 48 100% 622,000 1,165,000
Associates, Ltd. Texas

Klimpel Manor, Ltd Fullerton, Klimpel Manor
California Apartments 1,774,000 1,774,000 59 100% 3,360,000 1,962,000

Lamesa Seniors Lamesa, Winston Sullivan 143,000 143,000 24 92% 284,000 673,000
Community, Ltd. Texas

Laredo Heights Navasota, Donald W. Sowell 225,000 225,000 48 96% 413,000 995,000
Apartments Ltd. Texas

Mountainview North John C. Loving and
Apartments Limited Wilkesboro, Gordon D. Brown, Jr. 195,000 195,000 24 100% 387,000 998,000
Partnership North
Carolina

Palestine Seniors Palestine, Winston Sullivan 225,000 225,000 42 100% 446,000 1,128,000
Community, Ltd. Texas

Pecan Grove Limited Forrest Conrad Beggs, Audrey
Partnership City, Beggs and Russell
Arkansas Altizer 240,000 240,000 32 97% 486,000 1,114,000

6

----------------------------- --------------------------------------------
As of March 31, 1999 As of December 31, 1998
----------------------------- --------------------------------------------
Partnership's Encumbrances
Total Investment Amount of Estimated Low of Local
General Partner in Local Limited Investment Number Occu- Income Housing Limited
Partnership Name Location Name Partnerships Paid to Date of Units pancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------

Pioneer Street Bakersfield, Philip R. Hammond,
Associates California Jr. and Walter A.
Dwelle 2,222,000 2,222,000 112 92% 4,116,000 1,883,000

Sidney Apartments I, Sidney, Retro Development,
Limited Partnership Nebraska Inc. And Most
Worshipful Prince
Hall Grand Lodge 530,000 530,000 18 72% 972,000 436,000

Southcove Associates Orange Cove, Philip R. Hammond, 2,000,000 2,000,000 54 91% 3,585,000 1,532,000
Califonia Jr. and Diane M.
Hammond

Walnut Turn Buna, Olsen Securities Corp. 188,000 188,000 24 92% 344,000 690,000
Associates, Ltd. Texas ---------- ---------- --- ------ ---------- ----------
$ 12,033,000 $12,033,000 892 91.96% $ 21,963,000 $ 27,277,000
========== ========== === ====== ========== ==========

7

-----------------------------------------------------------------------
For the year ended December 31, 1999
-----------------------------------------------------------------------
Low Income Housing Credits
Partnership Name Rental Income Net loss Allocated to Partnership
- --------------------------------------------------------------------------------------------------------------------

Apartment Housing of East
Brewton, Ltd. $ 91,000 $ (78,000) 98.99%

Autumn Trace Associates, Ltd. 204,000 (50,000) 95.00%

Broken Bow Apartments I,
Limited Partnership 43,000 (111,000) 99.00%

Candleridge Apartments of
Waukee L.P. II 120,000 (10,000) 99.00%

Chadwick Limited Partnership 188,000 (62,000) 99.00%

Comanche Retirement Village,
Ltd. 68,000 (15,000) 99.00%

Crossings II Limited Dividend
Housing Association Limited
Partnership 665,000 (140,000) 98.99%

EW, a Wisconsin Limited
Partnership 99,000 (31,000) 99.00%

Garland Street Limited
Partnership 66,000 (29,000) 99.00%

Hereford Seniors Community,
Ltd. 93,000 (5,000) 99.00%

Hickory Lane Associates, Ltd 115,000 (16,000) 99.00%

Honeysuckle Court Associates,
Ltd. 194,000 (23,000) 95.00%

Klimpel Manor, Ltd 362,000 (74,000) 96.00%

8

-----------------------------------------------------------------------
For the year ended December 31, 1999
-----------------------------------------------------------------------
Low Income Housing Credits
Partnership Name Rental Income Net loss Allocated to Partnership
- --------------------------------------------------------------------------------------------------------------------

Lamesa Seniors Community, Ltd. 81,000 (11,000) 99.00%

Laredo Heights Apartments Ltd. 146,000 (3,000) 99.00%

Mountainview Apartments
Limited Partnership 93,000 (13,000) 99.00%

Palestine Seniors Community,
Ltd. 142,000 5,000 99.00%

Pecan Grove Limited Partnership 120,000 (42,000) 99.00%

Pioneer Street Associates 482,000 (54,000) 99.00%

Sidney Apartments I, Limited
Partnership 62,000 (47,000) 99.00%

Southcove Associates 213,000 (109,000) 99.00%

Walnut Turn Associates, Ltd. 90,000 (29,000) 99.00%
--------- --------
$ 3,737,000 $ (947,000)
========= ========

9

Item 3. Legal Proceedings

During the year, Associates identified a potential problem with a developer who,
at the time, was the local general partner in six Local Limited Partnerships.
The Partnership has a 99% limited partnership interest in two of those six Local
Limited Partnerships. Those investments are Broken Bow Apartments I, and Sidney
Apartments I. All of the properties continue to experience operating deficits.
The local general partner ceased funding the operating deficits, which placed
the Local Limited Partnerships in jeopardy of foreclosure. Consequently,
Associates voted to remove the local general partner and the management company
from the Local Limited Partnerships. After the local general partner contested
its removal, Associates commenced legal action on behalf of the Local Limited
Partnerships and was successful in getting a receiver appointed to manage the
Local Limited Partnerships and an unaffiliated entity appointed as property
manager. Associates was subsequently successful in attaining a summary judgment
to confirm the removal of the local general partner, the receiver was discharged
and Associates now controls all six of the Local Limited Partnerships.

The six Local Limited Partnerships (hereinafter referred to as "Defendants") are
now defendants in a separate lawsuit. The lawsuit has been filed by eight other
partnerships in which the local general partner of the Local Limited
Partnerships is or was involved (the "Plaintiffs"). The Plaintiffs allege that
the local general partner accepted funds from the Plaintiffs and improperly
loaned these funds to the Defendants. Discovery in this lawsuit is ongoing and
Associates will continue to pursue an aggressive defense on behalf of the
Defendants.

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

NONE.

PART II.

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

Item 5a.

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

(b) At March 31, 2000, there were 845 Limited Partners.

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

(d) No unregistered securities were sold by the Partnership during the year
ended March 31, 2000.

Item 5b.

NOT APPLICABLE

10

Item 6. Selected Financial Data

Selected balance sheet information for the Partnership is as follows:

March 31 December 31
-------------------------- ---------------------------------------------------
2000 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- -----------

ASSETS
Cash and cash
equivalents $ 180,133 $ 552,348 $ 738,364 $ 1,480,862 $ 2,371,389 $ 5,285,730
Investments in
limited 8,311,454 10,092,782 10,274,595 9,738,583 10,096,100 9,417,744
partnerships, net
Due from affiliate - - - - 53,200 -
Loans receivable - - - 259,496 - -
Other assets 998 998 2,534 20,245 10,956 29,568
----------- ----------- ----------- ----------- ----------- -----------

$ 8,492,585 $ 10,646,128 $ 11,015,493 $ 11,499,186 $ 12,531,645 $ 14,733,042
=========== =========== =========== =========== =========== ===========

LIABILITIES
Payables to limited
partnerships $ - $ 421,025 $ 605,517 $ 411,543 $ 666,716 $ 2,134,797
Accrued expenses 86,965 - - - - -
Accrued fees and
expenses due to
general partner
and affiliates 72,598 29,722 28,066 1,137 9,339 146,685

PARTNERS' EQUITY 8,333,022 10,195,381 10,381,910 11,086,506 11,855,590 12,451,560
----------- ----------- ----------- ----------- ----------- -----------

$ 8,492,585 $ 10,646,128 $ 11,015,493 $ 11,499,186 $ 12,531,645 $ 14,733,042
=========== =========== =========== =========== =========== ===========

Selected results of operations, cash flows and other information for the
Partnership are as follows:

For the
Year
Ended For the Three Months For the Years Ended
March 31 Ended March 31 December 31
---------- ------------------------ --------------------------------------------------

2000 1999 1998 1998 1997 1996 1995
---------- ----------- ----------- ----------- ---------- ---------- ----------
(Unaudited)

Income (loss) from
operations (Note 1) $ (870,197) $ (21,846) $ (1,492) $ (50,484) $ (31,969) $ 55,374 $ 56,606
Equity in losses of
limited
partnerships (992,162) (164,683) (191,552) $ (658,728) (737,115) (628,631) (628,521)
----------- ----------- ---------- ---------- ---------- ---------- ----------

Net loss $ (1,862,359) $ (186,529) $ (193,044) $ (709,212) $ (769,084) $ (573,257) $ (571,915)
=========== =========== ========== ========== ========== ========== ==========

Net loss allocated to:
General partner $ (18,624) $ (1,865) $ (1,930) $ (7,092) $ (7,691) $ (5,733) $ (5,719)
=========== =========== ========== ========== ========== ========== ==========

Limited partners $ (1,843,735) $ (184,664) $ (191,114) $ (702,120) $ (761,393) $ (567,524) $ (566,196)
=========== =========== ========== ========== ========== ========== ==========

Net loss per limited
partner unit $ (118.19) $ (11.84) $ (12.25) $ (45.01) $ (48.81) $ (36.38) $ (46.90)
=========== =========== ========== ========== ========== ========== ==========

Outstanding weighted
limited partner units 15,600 15,600 15,600 15,600 15,600 15,600 12,073
=========== =========== ========== ========== ========== ========== ==========

Note 1 - Loss from operations include a charge for impairment losses on
investments in limited partnerships of $766,559. (See Note 2 to the audited
financial statements.)

11

For the
Year
Ended For the Three Months For the Years Ended
March 31 Ended March 31 December 31
----------- ------------------------ ---------------------------------------------------
2000 1999 1998 1998 1997 1996 1995
----------- ----------- ----------- ----------- ---------- ---------- -----------
(Unaudited)

Net cash provided by
(used in):
Operating activities $ (19,827) $ (8,424) $ 12,245 $ 26,255 $ 52,765 $ 60,895 $ 54,970
Investing activities (352,388) (177,592) (109,910) (768,753) (935,090) (2,837,890) (5,315,585)
Financing activities - - - - (8,202) (137,346) 9,826,215
---------- ----------- ----------- ----------- ---------- ---------- ----------

Net change in cash and
cash equivalents (372,215) (186,016) (97,665) (742,498) (890,527) (2,914,341) 4,565,600

Cash and cash
equivalents,
beginning of period 552,348 738,364 1,480,862 1,480,862 2,371,389 5,285,730 720,130
---------- ----------- ----------- ----------- ---------- ---------- ----------

Cash and cash
equivalents,
end of period $ 180,133 $ 552,348 $ 1,383,197 $ 738,364 $ 1,480,862 $ 2,371,389 $ 5,285,730
========== =========== =========== =========== ========== ========== ==========

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

1999 1998 1997 1996 1995
--------------- ---------------- --------------- --------------- ----------------

Federal $ 135 $ 124 $ 113 $ 105 $ 76
State - - - - -
-------------- -------------- -------------- -------------- ---------------

Total $ 135 $ 124 $ 113 $ 105 $ 76
============== ============== ============== ============== ===============

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

Forward Looking Statements

With the exception of the discussion regarding historical information,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other discussions elsewhere in this Form 10-K contain forward
looking statements. Such statements are based on current expectations subject to
uncertainties and other factors which may involve known and unknown risks that
could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are based upon
assumptions about future events which may not prove to be accurate.

Risks and uncertainties inherent in forward looking statements include, but are
not limited to, our future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the low income housing tax
credit property market and the economy in general, as well as legal proceedings.
Historical results are not necessarily indicative of the operating results for
any future period.

Subsequent written and oral forward looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the Consolidated Financial Statements and the Notes thereto
included elsewhere in this filing.

12

Uncertainty with Respect to Investment in Broken Bow and Sidney

The Partnership has two investments accounted for under the equity method,
consisting of 99% limited partnership interests in each of Broken Bow Apartments
I, Limited Partnership ("Broken Bow"), and Sidney Apartments I, Limited
Partnership ("Sidney").

The independent auditors engaged to perform an audit of Broken Bow and Sidney's
financial statements as of and for the year ended December 31, 1999, were unable
to form an opinion on those financial statements. This was due to the inability
to obtain from the former local general partner certain general ledger
information for a period of approximately three months and reliable
confirmations of advances to/notes receivable from the former local general
partner. Further, the independent auditors were unable to obtain management
representation letters from the former property management company, which is an
affiliate of the former local general partner. As a result, the Partnership has
not included the financial information of Broken Bow and Sidney in the combined
condensed financial statements presented in Note 3 to the financial statements.
The combined condensed financial information presented in Note 3 for prior
periods has been restated to exclude the accounts of Broken Bow and Sidney. The
Partnership has reflected equity in the net losses of Broken Bow and Sidney
totaling $156,823 ($(10.05) per limited partnership unit) for the year ended
March 31, 2000, based on nine months of reported results provided by Broken Bow
and Sidney and on three months of results estimated by Associates. Such
estimates may be materially misstated due to the lack of corroborative financial
information.

Broken Bow and Sidney continue to experience negative cash flows from
operations. During the year ended March 31, 2000, the Partnership advanced
$120,906 in cash to Broken Bow and Sidney for operating expenses, including
legal fees relating to certain litigation involving these and other properties
as outlined in Note 8, as well as another $30,753 in cash since year end.
Associates is currently negotiating for a restructuring of the related bank
loans, which would increase cash flow from operations. Associates may not be
successful in the restructuring of these loans. If the loans are not
restructured, the Partnership may be unable to support these properties.
Consequently, the Partnership may be forced to sell all or a portion of its
interests in these properties. Further, the lender may attempt to foreclose on
the Broken Bow and Sidney properties.

As a result of the foregoing, Associates has performed an evaluation of the
Partnership's remaining investment balances in Broken Bow and Sidney, including
the cash advances noted above and other anticipated costs. It has been
determined that an impairment adjustment is necessary and an impairment loss of
$766,559 has been recognized at March 31, 2000. This impairment loss includes
$558,688 in remaining book value of the Partnership's investments in Broken Bow
and Sidney after the write off of $107,283 due to Broken Bow and Sidney, the
$120,906 and $30,753 cash advances, a $37,670 accrual for anticipated legal
costs, and $18,542 of estimated accounting and other related costs.

As a result of the aforementioned operating difficulties and the litigation as
discussed in Item 3, Legal Proceedings, there is uncertainty as to whether the
Partnership will ultimately retain its interests in Broken Bow and Sidney. If
the investments are sold or otherwise not retained, the Partnership could be
subject to recapture of tax credits and certain prior tax deductions. There is
further uncertainty as to costs that the Partnership may ultimately incur in
connection with its investments in Broken Bow and Sidney. The Partnership's
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.

Financial Condition

The Partnership's assets at March 31, 2000 consisted primarily of $180,000 in
cash and aggregate investments in the twenty-two Local Limited Partnerships of
$8,311,000. Liabilities at March 31, 2000 primarily consisted of $87,000 of
accrued expenses and $73,000 due to General Partner or affiliates for advances.

13

Results of Operations

Year Ended March 31, 2000 Compared to Year Ended December 31, 1998. The
Partnerships net loss for the year ended March 31, 2000 was $(1,862,000),
reflecting an increase of $(1,153,000) from the net loss experienced for the
year ended December 31, 1998 of $(709,000). The increase in net loss is due to
the impairment loss recorded in connection with two of the limited partnership
investments totaling $(767,000), a reduction in income of $(29,000) and an
increase in the equity in losses of limited partnerships of $(333,000).

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
The Partnership's net loss for the three months ended March 31, 1999 was
$187,000 reflecting a decrease of $6,000 from the net loss experienced for the
three months ended March 31, 1998. The decline in net loss is primarily due to
equity in losses of limited partnerships which declined by $27,000 to $(165,000)
for the three months ended March 31, 1999 from $(192,000) for the three months
ended March 31, 1998. The reduction in equity losses recognized was partially
offset by an increase in loss from operations of $21,000 to $(22,000) for the
three months ended March 31, 1999 from $(1,000) for the three months ended March
31, 1998, due to a comparable increase in operating expense allocations and a
decrease in interest income.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. The
Partnership's net loss for 1998 was $(709,000), reflecting a decrease of $60,000
from the net loss experienced in 1997. The decline in net loss is primarily due
to equity in losses from limited partnerships which declined to $(659,000) in
1998 from $(737,000) in 1997 and a decrease in amortization expense of $9,000,
partially offset by a decrease in interest income of $27,000.

Cash Flows

Year Ended March 31, 2000 Compared to Year Ended December 31, 1998. Net decrease
in for the year ended March 31, 2000 was $(372,000) compared to a net decrease
in cash for the year ended December 31, 1998 of $(742,000). The change was due
primarily to a decrease in investments in limited partnerships of $787,000
offset by an increase of $(121,000) in cash advances paid to limited
partnerships and a decrease in loans collected from limited partnerships of
$(259,000). * * * *

Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998.
Net cash used during the three months ended March 31, 1999 was $(186,000),
compared to net cash used during the three months ended March 31, 1998 of
$(98,000). The change was due primarily to an increase in investments in limited
partnerships of $72,000 and an increase in cash used for operating activities of
$20,000, partially offset by an increase in distributions from limited
partnerships of $4,000.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. Net cash
used in 1998 was $(742,000), compared to net cash used in 1997 of $(891,000).
The change was due primarily to a decrease in cash used for investments in
limited partnerships of $164,000, a refund of offering expenses received in 1998
of $5,000, and a decrease in cash paid to the General Partner and or affiliates
of $17,000, partially offset by a decrease in interest income received of
$35,000, and a decline in distributions from Local Limited Partnerships of
$2,000.

During the year ended March 31, 2000 and the three months ended March 31, 1999
accrued payables, which consist primarily of related party management fees due
to the General Partner, increased by $130,000 and $2,000, respectively. The
General Partner does not anticipate that these accrued fees will be paid in full
until such time as capital reserves are in excess of future foreseeable working
capital requirements of the Partnership.

The Partnership expects its future cash flows, together with its net available
assets at March 31, 2000, to be sufficient to meet all currently foreseeable
future cash requirements.

14

IMPACT OF YEAR 2000

WNC & Associates, Inc.

Status of Readiness

Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its general partner. IT systems include computer hardware and software used
to produce financial reports and tax return information. This information is
then used to generate reports to investors and regulatory agencies, including
the Internal Revenue Service and the Securities and Exchange Commission. The IT
systems of WNC are year 2000 compliant.

Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems include machinery and equipment such as telephones, voice mail and
electronic postage equipment. The non-IT systems of WNC are year 2000 compliant.

Service Providers. WNC also relies on the IT and non-IT systems of service
providers. Service providers include utility companies, financial institutions,
telecommunications carriers, municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider, financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant. To date, WNC has not encountered
significant year 2000 issues or business disruptions from its service providers.

Costs to Address Year 2000 Issues

The cost to address year 2000 issues for WNC has been less than $25,000.

Risk of Year 2000 Issues

Although WNC has encountered no significant year 2000 issues to date, the most
reasonable and likely result from non-year 2000 compliance of systems of the
service providers noted above would be the disruption of normal business
operations for WNC. This disruption could, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.

Local Limited Partnerships

Status of Readiness

To date, WNC and the Partnership have encountered no significant year 2000
issues with respect to the Local Limited Partnerships.

Costs to Address Year 2000 Issues

There has been and will be no cost to the Partnership as a result of assessing
year 2000 issues for the Local Limited Partnerships. Although no significant
year 2000 issues have been encountered to date, the cost to deal with potential
year 2000 issues of the Local Limited Partnerships cannot be estimated at this
time.

15

Risk of Year 2000 Issues

Although no significant year 2000 issues have been encountered to date, there
can be no assurance that the Partnership will be unaffected by year 2000 issues.
The most reasonable and likely result from non-year 2000 compliance will be the
disruption of normal business operations for the Local Limited Partnerships,
including but not limited to the possible failure to properly collect rents and
meet their obligations in a timely manner. This disruption would, in turn, lead
to delays by the Local Limited Partnerships in performing reporting and
fiduciary responsibilities on behalf of the Partnership. The worst-case scenario
would include the initiation of foreclosure proceedings on the property by
mortgage debt holders. Under these circumstances, WNC or its affiliates will
take actions necessary to minimize the risk of foreclosure, including the
removal and replacement of a Local General Partner by the Partnership. These
delays would likely be temporary and would likely not have a material effect on
the Partnership or WNC.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

NOT APPLICABLE

Item 8. Financial Statements and Supplementary Data

16

Report of Independent Certified Public Accountants

To the Partners
WNC Housing Tax Credit Fund IV, L.P., Series 2

We have audited the accompanying balance sheets of WNC Housing Tax Credit Fund
IV, L.P., Series 2 (a California Limited Partnership) (the "Partnership") as of
March 31, 2000 and 1999, and December 31, 1998, and the related statements of
operations, partners' equity (deficit) and cash flows for the year ended March
31, 2000, the three months ended March 31, 1999 and the year ended December 31,
1998. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. A significant portion of the financial
statements of the limited partnerships in which the Partnership is a limited
partner were audited by other auditors whose reports have been furnished to us.
As discussed in Note 3 to the financial statements, the Partnership accounts for
its investments in limited partnerships using the equity method. The portion of
the Partnership's investments in limited partnerships audited by other auditors
represented 81%, 75% and 72% of the total assets of the Partnership at March 31,
2000 and 1999 and December 31, 1998, respectively. Our opinion, insofar as it
relates to the amounts included in the financial statements for the limited
partnerships which were audited by others, is based solely on the reports of the
other auditors.

Except as discussed in the following paragraph, we conducted our audits in
accordance with 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 financial statement presentation. We believe that our
audits and the reports of the other auditors provide a reasonable basis for our
opinion.

As more thoroughly discussed in Note 2 to the financial statements, the
independent auditors engaged to perform the audits of the financial statements
as of and for the year ended December 31, 1999 for Broken Bow Apartments I, L.P.
("Broken Bow") and Sidney Apartments I, L.P. ("Sidney"), were unable to express
an opinion on those financial statements. The Partnership has reflected equity
in the net losses of Broken Bow and Sidney totaling $156,823 ($(10.05) per
limited partnership unit) for the year ended March 31, 2000. The Partnership has
also recorded an impairment of its investment in the two limited partnerships
totaling $766,559 ($(49.14) per limited partnership unit) for the year ended
March 31, 2000.

In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had the independent auditors been able to
form an opinion on Broken Bow and Sidneys' financial statements, the financial
statements referred to above present fairly, in all material respects, the
financial position of WNC Housing Tax Credit Fund V, L.P., Series 3 (a
California Limited Partnership) as of March 31, 2000 and 1999, and December 31,
1998, and the results of its operations and its cash flows for the year ended
March 31, 2000, the three months ended March 31, 1999 and the year ended
December 31, 1998, in conformity with generally accepted accounting principles.

/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP

Orange County, California
August 16, 2000

17

INDEPENDENT AUDITORS' REPORT

To the Partners
WNC Housing Tax Credit Fund IV, L.P., Series 2

We have audited the statements of operations, partners' equity (deficit) and
cash flows of WNC Housing Tax Credit Fund IV, L.P., Series 2 ( a California
Limited Partnership) (the "Partnership") for the year ended December 31, 1997.
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 audit. We did not audit the financial statements of the
limited partnerships in which WNC Housing Tax Credit Fund IV, L.P., Series 2 is
a limited partner. These investments, as discussed in Note 2 to the financial
statements, are accounted for by the equity method. The investment in these
limited partnerships represented 85% of the total assets of WNC Housing Tax
Credit Fund IV, L.P., Series 2 at December 31, 1997. Substantially all of the
financial statements of the limited partnerships were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as it relates
to the amounts included for these limited partnerships, is based solely on the
reports of the other auditors.

We conducted our audits in accordance with 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 financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the results of operations and cash flows of WNC Housing Tax Credit Fund IV,
L.P., Series 2 (a California Limited Partnership), for the year ended December
31, 1997, in conformity with generally accepted accounting principles.

/s/ CORBIN & WERTZ
CORBIN & WERTZ

Irvine, California
April 23, 1998

18

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

BALANCE SHEETS

March 31 December 31
------------------------------ --------------
2000 1999 1998
-------------- ------------- --------------
ASSETS

Cash and cash equivalents $ 180,133 $ 552,348 $ 738,364
Investments in limited partnerships,
net (Notes 2 and 3) 8,311,454 10,092,782 10,274,595
Other assets 998 998 2,534
-------------- ------------- --------------

$ 8,492,585 $ 10,646,128 $ 11,015,493
============== ============= ==============

LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)

Liabilities:
Payables to limited partnerships (Note 5) $ - $ 421,025 $ 605,517
Accrued expenses (Note 3) 86,965 - -
Accrued fees and expenses due to General
Partner and affiliates (Note 4) 72,598 29,722 28,066
-------------- ------------- --------------

Total liabilities 159,563 450,747 633,583
-------------- ------------- --------------

Commitments and contingencies (Note 7)

Partners' equity (deficit):
General partner (68,982) (50,358) (48,493)
Limited partners (20,000 units authorized;
15,600 units issued and outstanding) 8,402,004 10,245,739 10,430,403
-------------- ------------- --------------

Total partners' equity 8,333,022 10,195,381 10,381,910
-------------- ------------- --------------

$ 8,492,585 $ 10,646,128 $ 11,015,493
============== ============= ==============

See independent auditors' report and
accompanying notes to financial statements.
19

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

STATEMENTS OF OPERATIONS

For the
For the Three
Year Months
Ended Ended For the Years Ended
March 31 March 31 December 31
------------- ------------ ----------------------------
2000 1999 1998 1997
------------- ------------ ------------ -------------

Interest income $ 14,374 $ 6,850 $ 47,017 $ 74,570
Other income 4,000 - - -
------------- ------------ ------------ -------------

Total income 18,374 6,850 47,017 74,570
------------- ------------ ------------ -------------
Operating expenses:
Amortization (Notes 3 and 4) 40,935 10,230 32,099 40,823
Asset management fees (Note 4) 42,900 10,725 42,900 42,900
Other 38,177 7,741 22,502 22,816
Impairment on investments in limited
partnerships (Note 2) 766,559 - - -
------------- ------------ ------------ -------------

Total operating expenses 888,571 28,696 97,501 106,539
------------- ------------ ------------ -------------

Income (loss) from operations (870,197) (21,846) (50,484) (31,969)

Equity in losses of limited
partnerships (Note 3) (992,162) (164,683) (658,728) (737,115)
------------- ------------ ------------ -------------

Net loss $ (1,862,359) $ (186,529) $ (709,212) $ (769,084)
============= ============ ============ =============
Net loss allocated to:
General partner $ (18,624) $ (1,865) $ (7,092) $ (7,691)
============= ============ ============ =============

Limited partners $ (1,843,735) $ (184,664) $ (702,120) $ (761,393)
============= ============ ============ =============

Net loss per limited partner unit $ (118.19) $ (11.84) $ (45.01) $ (48.81)
============= ============ ============ =============

Outstanding weighted limited partner units 15,600 15,600 15,600 15,600
============= ============ ============ =============

See independent auditors' report and
accompanying notes to financial statements.
20

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

For The Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

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

Partners' equity (deficit) at January 1, 1997 $ (33,756) $ 11,889,346 $ 11,855,590

Net loss (7,691) (761,393) (769,084)
--------------- --------------- ---------------

Partners' equity (deficit) at December 31, 1997 (41,447) 11,127,953 11,086,506

Offering costs 46 4,570 4,616

Net loss (7,092) (702,120) (709,212)
--------------- --------------- ---------------

Partners' equity (deficit) at December 31, 1998 (48,493) 10,430,403 10,381,910

Net loss (1,865) (184,664) (186,529)
--------------- --------------- ---------------

Partners' equity (deficit) at March 31, 1999 (50,358) 10,245,739 10,195,381

Net loss (18,624) (1,843,735) (1,862,359)
--------------- --------------- ---------------

Partners' equity (deficit) at March 31, 2000 $ (68,982) $ 8,402,004 $ 8,333,022
=============== =============== ===============

See independent auditors' report and
accompanying notes to financial statements.
21

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS

For the
For the Three
Year Months
Ended Ended For the Years Ended
March 31 March 31 December 31
------------- ------------ ----------------------------
2000 1999 1998 1997
------------- ------------ ------------ -------------

Cash flows from operating activities:
Net loss $ (1,862,359) $ (186,529) $ (709,212) $ (769,084)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 40,935 10,230 32,099 40,823
Impairment loss on investments in limited
partnerships 766,559 - - -
Equity in loss of limited
partnerships 992,162 164,683 658,728 737,115
Change in other assets - 1,536 17,711 9,347
Change in due from affiliates - - - 34,564
Change in accrued fees and expenses
due to General Partner and affiliates 42,876 1,656 26,929 -
------------- ------------ ------------ -------------
Net cash provided by (used in)
operating Activities (19,827) (8,424) 26,255 52,765
------------- ------------ ------------ -------------
Cash flows from investing activities:
Investments in limited
partnerships, net (251,149) (184,492) (1,037,700) (674,929)
Capitalized acquisition costs and
fees - - (465) (8,278)
Distributions from limited
partnerships 19,667 6,900 5,300 7,613
Loans receivable - - 259,496 (259,496)
Offering expenses - - 4,616 -
Cash advances to limited partnerships (120,906) - - -
------------- ------------ ------------ -------------
Net cash used in investing
activities (352,388) (177,592) (768,753) (935,090)
------------- ------------ ------------ -------------
Cash flows from financing activities:
Advances due to general partner
and affiliates - - - (8,202)
------------- ------------ ------------ -------------
Net cash used in financing
activities - - - (8,202)
------------- ------------ ------------ -------------
Net decrease in cash and cash
equivalents (372,215) (186,016) (742,498) (890,527)

Cash and cash equivalents,
beginning of period 552,348 738,364 1,480,862 2,371,389
------------- ------------ ------------ -------------
Cash and cash equivalents, end of
period $ 180,133 $ 552,348 $ 738,364 $ 1,480,862
============= ============ ============ =============

Continued
22

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS - CONTINUED

For the
For the Three
Year Months
Ended Ended For the Years Ended
March 31 March 31 December 31
------------ ----------- ------------------------------
2000 1999 1998 1997
------------ ----------- ------------- ---------------

SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Taxes paid $ 800 $ - $ 800 $ 800
============ ============ ============= ===============

See independent auditors' report and
accompanying notes to financial statements.
23

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

WNC Housing Tax Credit Fund IV, L.P., Series 2 (the "Partnership") was formed on
September 27, 1993 under the laws of the state of California and commenced
operations on July 18, 1994. The Partnership was formed to invest primarily in
other limited partnerships (the "Local Limited Partnerships") which own and
operate multi-family housing complexes (the "Housing Complex") that are eligible
for low income housing credits. The local general partners (the "Local General
Partners") of each Local Limited Partnership retain responsibility for
maintaining, operating and managing the Housing Complex.

The general partner is WNC Tax Credit Partners, IV, L.P. (the "General
Partner"), a California limited partnership. WNC & Associates, Inc. ("WNC") is
the general partner of the General Partner. Wilfred N. Cooper, Sr., through the
Cooper Revocable Trust, owns 66.8% of the outstanding stock of WNC. John B.
Lester, Jr. was the original limited partner of the Partnership and owns,
through the Lester Family Trust, 28.6% of the outstanding stock of WNC. Wilfred
N. Cooper, Jr., President of WNC, owns 2.1% of the outstanding stock of WNC.

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

The Partnership Agreement authorized the sale of 20,000 units at $1,000 per unit
("Units"). The offering of Units concluded in July 1995 at which time 15,600
Units representing subscriptions, net of discounts for volume purchases of more
than 100 units, in the amount of $15,241,000 had been accepted. The General
Partner has a 1% interest in operating profits and losses, taxable income and
losses, cash available for distribution from the Partnership and tax credits.
The limited partners will be allocated the remaining 99% of these items in
proportion to their respective investments.

After the limited partners have received proceeds from sale or refinancing equal
to their capital contributions and their return on investment (as defined in the
Partnership Agreement) and the General Partner has received proceeds equal to
its capital contributions and a subordinated disposition fee (as described in
Note 4) from the remainder, any additional sale or refinancing proceeds will be
distributed 90% to the limited partners (in proportion to their respective
investments) and 10% to the General Partner.

Change in Reporting Year End

In 1999, the Partnership elected to change its year end for financial reporting
purposes from December 31 to March 31. All financial information reflected in
the financial statements and related footnotes has been adjusted for this change
in year end except for the combined condensed financial information relating to
the Local Limited Partnerships included in Note 3.

24

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Risks and Uncertainties

The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local Limited Partnerships. The value of the Partnership's investments will be
subject to changes in national and local economic conditions, including
unemployment conditions, which could adversely impact vacancy levels, rental
payment defaults and operating expenses. This, in turn, could substantially
increase the risk of operating losses for the Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters which might be
uninsurable. Because the Partnership's operations will depend on these and other
factors beyond the control of the General Partner and the Local General
Partners, there can be no assurance that the anticipated low income housing
credits will be available to Limited Partners.

In addition, Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.

Method of Accounting For Investments in Limited Partnerships

The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnership are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 3).

Losses from Local Limited Partnerships for the years ended December 31, 1998 and
1997 have been recorded by the Partnership based on reported results provided by
the Local Limited Partnerships. Losses from Local Limited Partnerships for the
three months ended March 31, 1999 have been estimated by management of the
Partnership. Losses from limited partnerships for the year ended March 31, 2000
have been recorded by the Partnership based on nine months of reported results
provided by the Local Limited Partnerships and on three months of results
estimated by management of the Partnership. Losses from the limited partnerships
allocated to the Partnership will not be recognized to the extent that the
investment balance would be adjusted below zero.

25

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Offering Expenses

Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses are reflected as
a reduction of partners' capital and amounted to $970,717 as of March 31, 1999
and December 31, 1998, and $975,333 as of December 31, 1997.

Use of Estimates

The preparation of financial statements in conformity with 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 the reporting period.
Actual results could materially differ from those estimates.

Cash and Cash Equivalents

The Partnership considers highly liquid investments with maturities of three
months or less when purchased to be cash equivalents. As of March 31, 2000 and
1999, and December 31, 1998, the Partnership had no cash equivalents.

Concentration of Credit Risk

At March 31, 2000, the Partnership maintained a cash balance at a certain
financial institution in excess of the maximum federally insured amounts.

Net Loss Per Limited Partner Unit

Net loss per limited partnership unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net loss per unit
includes no dilution and is computed by dividing loss available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.

Reporting Comprehensive Income

In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of Partners' equity and bypass net income. The
Partnership adopted the provisions of this statement in 1998. For the periods
presented, the Partnership has no elements of other comprehensive income, as
defined by SFAS No. 130.

Reclassifications

Certain prior year balances have been reclassified to conform to the 2000
presentation.

26

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 2 - UNCERTAINTY WITH RESPECT TO INVESTMENTS IN BROKEN BOW AND SIDNEY:
IMPAIRMENT OF INVESTMENTS

The Partnership has three investments accounted for under the equity method,
consisting of 99% limited partnership interests in each of Broken Bow Apartments
I, Limited Partnership ("Broken Bow") and Sidney Apartments I, Limited
Partnership ("Sidney").

The independent auditors engaged to perform an audit of Broken Bow and Sidneys'
financial statements as of and for the year ended December 31, 1999, were unable
to form an opinion on those financial statements. This was due to the inability
to obtain from the former local general partner certain general ledger
information for a period of approximately three months and reliable
confirmations of advances to/notes receivable from the former local general
partner. Further, the independent auditors were unable to obtain management
representation letters from the former property management company, which is an
affiliate of the former local general partner. As a result, the Partnership has
not included the financial information of Broken Bow and Sidney in the combined
condensed financial statements presented in Note 3 to the financial statements.
The combined condensed financial information presented in Note 3 for prior
periods has been restated to exclude the accounts of Broken Bow and Sidney. The
Partnership has reflected equity in the net losses of Broken Bow and Sidney
totaling $156,823 ($(10.05) per limited partnership unit) for the year ended
March 31, 2000, based on nine months of reported results provided by Broken Bow
and Sidney and on three months of results estimated by WNC. Such estimates may
be materially misstated due to the lack of corroborative financial information.

Broken Bow and Sidney continue to experience negative cash flows from
operations. During the year ended March 31, 2000, the Partnership advanced
$120,906 in cash to Broken Bow and Sidney for operating expenses, including
legal fees relating to certain litigation involving these and other properties
as outlined in Note 8, as well as another $30,753 in cash since year end. WNC is
currently negotiating for a restructuring of the related bank loans, which would
increase cash flow from operations. WNC may not be successful in the
restructuring of these loans. If the loans are not restructured, the Partnership
may be unable to support these properties. Consequently, the Partnership may be
forced to sell all or a portion of its interests in these properties. Further,
the lender may attempt to foreclose on the Broken Bow and Sidney properties.

As a result of the foregoing, WNC has performed an evaluation of the
Partnership's remaining investment balances in Broken Bow and Sidney, including
the cash advances noted above and other anticipated costs. It has been
determined that an impairment adjustment is necessary and an impairment loss of
$766,559 has been recognized at March 31, 2000. This impairment loss includes
$558,688 in remaining book value of the Partnership's investments in Broken Bow
and Sidney; the $120,906 and $30,753 cash advances, a $37,670 accrual for
anticipated legal costs, and $18,542 of estimated accounting and other related
costs.

As a result of the aforementioned operating difficulties and the litigation as
discussed in Note 7, there is uncertainty as to whether the Partnership will
ultimately retain its interests in Broken Bow and Sidney. If the investments are
sold or otherwise not retained, the Partnership could be subject to recapture of
tax credits and certain prior tax deductions. There is further uncertainty as to
costs that the Partnership may ultimately incur in connection with its
investments in Broken Bow and Sidney. The Partnership's financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of the periods presented, the Partnership had acquired limited partnership
interests in twenty-two Local Limited Partnerships, each of which owns one
Housing Complex consisting of an aggregate of 892 apartment units. As of March
31, 1999, construction or rehabilitation of all but one of the apartment
complexes had been completed. The respective general partners of the Local
Limited Partnerships manage the day-to-day operations of the entities.
Significant Local Limited Partnership business decisions require approval from
the Partnership. The Partnership, as a limited partner, is entitled to 96% to
99%, as specified in the partnership agreements, of the operating profits and
losses, taxable income and losses and tax credits of the Limited Partnerships.

27

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS-continued

The Partnership's investments in Local Limited Partnerships as shown in the
balance sheets at March 31, 2000 and 1999 are approximately $876,000 and
$2,170,000, respectively, greater than the Partnership's equity at the preceding
December 31 as shown in the Local Limited Partnerships' combined financial
statements. This difference is primarily due to unrecorded losses, as discussed
below, acquisition, selection and other costs related to the acquisition of the
investments which have been capitalized in the Partnership's investment account
and to capital contributions payable to the limited partnerships which were
netted against partner capital in the Local Limited Partnership's financial
statements. The Partnership's investment is also lower than the Partnership's
equity as shown in the Local Limited Partnership's combined financial statements
due to the losses recorded by the Partnership for the three month period ended
March 31. Lastly, the difference is due to the exclusion of the financial
statements of Sidney and Broken Bow from the combined condensed financial
information presented below. See Note 2 for discussion.

Equity in losses of Local Limited Partnerships is recognized in the financial
statements until the related investment account is reduced to a zero balance.
Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after its share of
such net income equals the share of net losses not recognized during the
period(s) the equity method was suspended.

Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income. At March 31,2000 the investment account in one of
the Local Limited Partnerships had reached a zero balance. Consequently a
portion of the Partnership's estimate of it's share of losses for the year ended
March 31, 2000 amounting to approximately $9,000 has not been recognized by the
Partnership as of March 31, 2000.

Following is a summary of the equity method activity of the investments in
limited partnerships for the periods presented:

For the Year For the Three
Ended Months Ended
March 31 March 31 For the Years Ended December 31
--------------- --------------- -------------------------------
2000 1999 1998 1997
--------------- --------------- ------------- -------------

Investments per balance sheet, beginning of
year $ 10,092,782 $ 10,274,595 $ 9,738,583 $ 10,096,100
Tax credit adjustment (62,593) - (23,291) -
Capital contributions to limited
partnerships, net - - 827,482 194,036
Capital contributions to be paid - - 427,483 225,720
Impairment loss on investments in limited
partnerships (766,559) - - -
Capital contributions payable to Sidney and
Broken Bow offset to book value (107,283) - - -
Accrued expense (Note 2) 86,965 - - -
Cash advances (Note 2) 120,906 - - -
Capitalized acquisition fees and costs - - 465 8,278
Distributions received (19,667) (6,900) (5,300) (7,613)
Equity in losses of limited partnerships (992,162) (164,683) (658,728) (737,115)
Amortization of paid acquisition fees and
costs (40,935) (10,230) (32,099) (40,823)
------------- -------------- ------------- -------------

Investments per balance sheet, end of period $ 8,311,454 $ 10,092,782 $ 10,274,595 $ 9,738,583
============= ============== ============= =============

28

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

The financial information from the individual financial statements of the Local
Limited Partnerships includes rental and interest subsidies. Rental subsidies
are included in total revenues and interest subsidies are generally netted
against interest expense. Approximate combined condensed financial information
from the individual financial statements of the Local Limited Partnerships as of
December 31 and for the years then ended is as follows (Combined condensed
financial information for Broken Bow and Sidney have been excluded from the
presentation below. See Note 2 for further discussion):

COMBINED CONDENSED BALANCE SHEETS

1999 1998
--------------- ---------------
ASSETS

Buildings, net of accumulated amortization
of $5,551,000 and $4,180,000
for 1999 and 1998, respectively $ 31,791,000 $ 30,754,000
Land 1,557,000 1,553,000
Construction in progress - 1,895,000
Due from affiliates 1,000 -
Other assets 2,194,000 2,074,000
--------------- ---------------

$ 35,543,000 $ 36,276,000
=============== ===============
LIABILITIES

Construction and mortgage loans payable $ 26,091,000 $ 26,145,000
Other liabilities (including due to
related parties of $437,000 and
$465,000 for 1999 and 1998, respectively) 1,003,000 1,111,000
--------------- ---------------

27,094,000 27,256,000
--------------- ---------------
PARTNERS' CAPITAL

WNC Housing Tax Credit Fund IV, L.P., Series 2 7,435,000 7,923,000
Other partners 1,014,000 1,097,000
--------------- ---------------

8,449,000 9,020,000
--------------- ---------------

$ 35,543,000 $ 36,276,000
=============== ===============

29

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

COMBINED CONDENSED STATEMENTS OF OPERATIONS

1999 1998 1997
--------------- --------------- ---------------

Revenues $ 3,768,000 $ 3,750,000 $ 3,420,000
--------------- --------------- ---------------
Expenses:
Operating expenses 2,165,000 1,965,000 1,828,000
Interest expense 1,154,000 1,131,000 1,181,000
Depreciation and amortization 1,238,000 1,162,000 1,087,000
--------------- --------------- ---------------

Total expenses 4,557,000 4,258,000 4,096,000
--------------- --------------- ---------------

Net loss $ (789,000) $ (508,000) $ (676,000)
=============== =============== ===============
Net loss allocable to the Partnership, before equity
in losses of Broken Bow and Sidney $ (778,000) $ (501,000) $ (661,000)
=============== =============== ===============
Net loss recorded by the Partnership, before equity in
losses of Broken Bow and Sidney $ (835,000) $ (501,000) $ (661,000)

Net loss of Broken Bow allocable to the Partnership (109,000) (42,000) (5,000)

Net loss of Sidney allocable to the Partnership (48,000) (116,000) (71,000)
--------------- --------------- ---------------

Net loss recorded by the Partnership $ (992,000) $ (659,000) $ (737,000)
=============== =============== ===============

Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired and the loss and recapture of the related tax credits could occur.

NOTE 4 - RELATED PARTY TRANSACTIONS

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

Acquisition fees of up to 8% of the gross proceeds from the sale of
Units as compensation for services rendered in connection with the
acquisition of Local Limited Partnerships. At the end of all periods
presented, the Partnership incurred acquisition fees of $1,058,950.
Accumulated amortization of these capitalized costs was $166,925,
$131,629 and $124,017 as of March 31, 2000 and 1999 and December 31,
1998, respectively.

Reimbursement of costs incurred by the General Partner in connection
with the acquisition of Local Limited Partnerships. These
reimbursements have not exceeded 1.2% of the gross proceeds. As of
March 31, 2000 and 1999 and December 31, 1998, the Partnership incurred
acquisition costs of $169,103, for all periods presented, which have
been included in investments in limited partnerships. Accumulated
amortization was $25,117, $19,478 and $16,859 as of March 31, 2000 and
1999 and December 31, 1998, respectively.

30

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 4 - RELATED PARTY TRANSACTIONS, continued

An annual asset management fee equal to the greater amount of (i)
$2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In
either case, the fee will be decreased or increased annually based on
changes to the Consumer Price Index. However, in no event will the
maximum amount exceed 0.2% of the invested assets of the Local Limited
Partnerships, including the Partnership's allocable share of the
mortgages. Management fees of $42,900 and $10,725 were incurred during
the year ended March 31, 2000 and the three months ended March 31,
1999, respectively, and $42,900 and $42,900 were incurred for the years
ended December 31, 1998 and 1997, respectively, of which $3,750 and
$5,950 were paid during the year ended March 31, 2000 and the three
months ended March 31, 1999 and $4,616 and $6,000 were paid during the
years ended December 31, 1998 and 1997, respectively.

A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a preferred return of 16% through December
31, 2003 and 6% thereafter (as defined in the Partnership Agreement)
and is payable only if the General Partner or its affiliates render
services in the sales effort.

The accrued fees and expenses due to General Partner and affiliates consist of
the following:

March 31 December 31
---------------------------- -------------
2000 1999 1998
--------- ------------ -------------

Reimbursement for expenses paid by the General
Partner or an affiliate $ 6,689 $ 2,963 $ 6,082

Asset management fee payable 65,909 26,759 21,984
----------- ------------ -------------

Total $ 72,598 $ 29,722 $ 28,066
=========== ============ =============

The General Partner does not anticipate that these accrued fees will be paid
until such time as capital reserves are in excess of future foreseeable working
capital requirements of the Partnership.

NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS

Payables to limited partnerships represent amounts which are due at various
times based on conditions specified in the limited partnership agreements. These
contributions are payable in installments and are due upon the limited
partnerships achieving certain operating and development benchmarks (generally
within two years of the Partnership's initial investment).

NOTE 6 - INCOME TAXES

No provision for income taxes has been recorded in the accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.

31

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 2
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Year Ended March 31, 2000,
For The Three Months Ended March 31, 1999 and
For The Years Ended December 31, 1998 and 1997

NOTE 7 - COMMITMENTS AND CONTINGENCIES

During the year, WNC identified a potential problem with a developer who, at the
time, was the local general partner in six Local Limited Partnerships. The
Partnership has a 99% limited partnership interest in two of those six Local
Limited Partnerships. Those investments are Broken Bow Apartments I, and Sidney
Apartments I. All the properties continue to experience operating deficits. The
local general partner ceased funding the operating deficits, which placed the
Local Limited Partnerships in jeopardy of foreclosure. Consequently, WNC voted
to remove the local general partner and the management company from the Local
Limited Partnerships. After the local general partner contested its removal, WNC
commenced legal action on behalf of the Local Limited Partnerships and was
successful in getting a receiver appointed to manage the Local Limited
Partnerships and an unaffiliated entity appointed as property manager. WNC was
subsequently successful in attaining a summary judgment to confirm the removal
of the local general partner, the receiver was discharged and WNC now controls
all six of the Local Limited Partnerships.

The six Local Limited Partnerships (hereinafter referred to as "Defendants") are
now defendants in a separate lawsuit. The lawsuit has been filed by eight other
partnerships in which the local general partner of the Local Limited
Partnerships is or was involved (the "Plaintiffs"). The Plaintiffs allege that
the local general partner accepted funds from the Plaintiffs and improperly
loaned these funds to the Defendants. Discovery in this lawsuit is ongoing and
WNC will continue to pursue an aggressive defense on behalf of the Defendants.

32

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

NOT APPLICABLE

PART III.

Item 10. Directors and Executive Officers of the Registrant

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

Directors and Executive Officers of WNC & Associates, Inc

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

Wilfred N. Cooper, Sr., age 69, is the founder, Chairman, 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 66, is Vice-Chairman, 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 37, is Executive Vice President, Chief Operating
Officer, a Director and a member of the Acquisition Committee of WNC &
Associates, Inc. He is President of, and a registered principal with, WNC
Capital Corporation, a member firm of the NASD, and is a Director of WNC
Management, Inc. He has been involved in investment and acquisition activities
with respect to real estate since he joined the Sponsor in 1988. Prior to this,
he served as Government Affairs Assistant with Honda North America in
Washington, D.C. Mr. Cooper is a member of the Advisory Board for LIHC Monthly
Report, a Director of NMHC and an Alternate Director of NAHB. He graduated from
The American University in 1985 with a Bachelor of Arts degree.

David N. Shafer, age 48, is Executive Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.

33

Michael L. Dickenson, age 43, is Vice President and 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 Services 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 in California and Texas.

Thomas J. Riha, age 45, 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 54, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President of MRW, Inc., a real estate
development and management firm. Mr. Garban is a member of the International
Association of Financial Planners. He graduated from Michigan State University
in 1967 with a Bachelor of Science degree in Business Administration.

N. Paul Buckland, age 37, is Vice President - Acquisitions and a member of the
Acquisition Committee 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 that 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.

David Turek, age 45, 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 63, 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.

34

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 Associates for the following fees:

(a) Annual Asset Management Fee. An annual asset management fee of the greater
of (i) $2,000 per multi-family housing complex or (ii) 0.275% of Gross
Proceeds. The base fee amount will be adjusted annually based on changes
in the Consumer Price Index, however in no event will the annual asset
management fee exceed 0.2% of Invested Assets. "Invested Assets" means the
sum of the Partnership's investment in Local Limited Partnerships and the
Partnership's allocable share of the amount of indebtedness related to the
Housing Complexes. Fees of $43,000, $11,000 and $43,000 were incurred
during the year ended March 31, 2000 and the three months ended March 31,
1999 and the year ended December 31, 1998, respectively. The Partnership
paid the General Partner or its affiliates $4,000, $6,000 and $5,000 of
those fees during the year ended March 31, 2000, the three months ended
March 31, 1999 and the year ended December 31, 1998, respectively.

(b) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing Complex. 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 Partnership's term. No disposition fees
have been paid.

(c) Operating Expense. The Partnership reimbursed the General Partner or its
affiliates for operating expenses of approximately $31,000, $11,000 and
$6,000 during the year ended March 31, 2000, the three months ended March
31, 1999 and the year ended December 31, 1998, respectively.

(d) Interest in Partnership. The General Partners receive 1% of the
Partnership's allocated Low Income Housing Credits, which approximated
$20,000 and $20,000 for the General Partner for the years ended March 31,
2000 and December 31, 1998. The General Partner is also entitled to
receive 1% of cash distributions. There were no distributions of cash to
the General Partner during the year ended March 31, 2000, the three months
ended March 31, 1999 or the year ended December 31, 1998.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners

(a) Security Ownership of Certain Beneficial Owners

The following is the only limited partner known to the General Partner
to own beneficially in excess of 5% of the outstanding Units.

Name and Address of Amount of Units
Title of Class Beneficial Owner Controlled Percent of Class
----------------------------- ---------------------------------- ------------------- -------------------

Units of Limited Sempra Energy Financial 4,000 Units 25.6%
Partnership Interests P.O. Box 126943
San Diego, CA 92113-6943

(b) Security Ownership of Management

Neither the General Partner, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.

35

(c) Changes in Control

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

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

Item 13. Certain Relationships and Related Transactions

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

36

PART IV.

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

Financial Statements

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

Report of Independent Certified Public Accountants
Independent Auditors' Report
Balance Sheets, March 31, 2000 and 1999 and December 31, 1998
Statements of Operations for the year and three months ended March 31,
2000 and 1999 and for the years ended December 31, 1998 and 1997
Statements of Partners' Equity (Deficit) for the three months ended
March 31, 2000 and 1999 and for the years ended December 31, 1998 and
1997
Statements of Cash Flows for the year and three months ended March 31,
2000 and 1999 and for the years ended December 31, 1998 and 1997
Notes to Financial Statements

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

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

(b) Reports on Form 8-K

1. A Form 8-K dated May 13, 1999 was filed on May 14, 1999 reporting the
dismissal of the Partnership's former auditors and the engagement of
new auditors. No financial statements were included.

(c) Exhibits

3.1 Articles of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement is included as Exhibit B to the
Prospectus which is included in Post-Effective No 11 to Registration
Statement on Form S-11 dated May 24, 1995 incorporated herein by
reference as Exhibit 3.

10.1 Amended and Restated Agreement of Limited Partnership of Chadwick
Limited Partnership filed as exhibit 10.1 to Form 8-K dated July 22,
1994 is hereby incorporated herein by reference as exhibit 10.1.

10.2 Second Amended and Restated Agreement of Limited Partnership of
Garland Street Limited Partnership filed as exhibit 10.2 to Form 8-K
dated July 22, 1994 is hereby incorporated herein by reference as
exhibit 10.2

10.3 Amended and Restated Agreement of Limited Partnership of Lamesa
Seniors Community, Ltd. filed as exhibit 10.3 to Form 8-K dated July
22, 1994 is hereby incorporated herein by reference as exhibit 10.3.

10.4 Amended and Restated Agreement of Limited Partnership of Palestine
Seniors Community, Ltd. filed as exhibit 10.4 to Form 8-K dated July
22, 1994 is hereby incorporated herein by reference as exhibit 10.4.

10.5 Second Amended and Restated Agreement of Limited Partnership of
Southcove Associates filed as exhibit 10.1 to Form 8-K dated August 8,
1994 is hereby incorporated herein by reference as exhibit 10.5.

10.6 Third Amended and Restated Agreement of Limited Partnership of
Southcove Associates filed as exhibit 10.2 to Form 8-K dated August 8,
1994 is hereby incorporated herein by reference as exhibit 10.6.

37

10.7 Amended and Restated Agreement of Limited Partnership of Comanche
Retirement Village, Ltd. filed as exhibit 10.1 to Form 8-K dated
August 31, 1994 is hereby incorporated herein by reference as exhibit
10.7.

10.8 Amended and Restated Agreement of Limited Partnership of Mountainview
Apartments Limited Partnership filed as exhibit 10.1 to Form 8-K dated
September 21, 1994 is hereby incorporated herein by reference as
exhibit 10.8.

10.9 Second Amendment to Amended and Restated Agreement of Limited
Partnership of Mountainview Apartments Limited Partnership filed as
exhibit 10.2 to Form 8-K dated September 21, 1994 is hereby
incorporated herein by reference as exhibit 10.9.

10.10 Amended and Restated Agreement of Limited Partnership of Pecan Grove
Limited Partnership filed as exhibit 10.3 to Form 8-K dated September
21, 1994 is hereby incorporated herein by reference as exhibit 10.10.

10.11 Second Amendment to Amended and Restated Agreement of Limited
Partnership of Pecan Grove Limited Partnership filed as exhibit 10.4
to Form 8-K dated September 21, 1994 is hereby incorporated herein by
reference as exhibit 10.11.

10.12 Second Amendment to and Entire Restatement of the Agreement of
Limited Partnership of Autumn Trace Associates, Ltd. filed as exhibit
10.1 to Form 8-K dated October 31, 1994 is hereby incorporated herein
by reference as exhibit 10.12.

10.13 Amended and Restated Agreement of Limited Partnership of EW , a
Wisconsin Limited Partnership filed as exhibit 10.2 to Form 8-K dated
October 31, 1994 is hereby incorporated herein by reference as exhibit
10.13.

10.14 Agreement of Limited Partnership of Klimpel Manor, Ltd. filed as
exhibit 10.3 to Form 8-K dated September 21, 1994 is hereby
incorporated herein by reference as exhibit 10.14.

10.15 Amended and Restated Agreement of Limited Partnership of Hickory Lane
Associates Limited filed as exhibit 10.15 to Form 10-K dated December
31, 1995 is hereby incorporated herein by reference as exhibit 10.15.

10.16 Amended and Restated Agreement of Limited Partnership of Honeysuckle
Court Associates, Ltd. filed as exhibit 10.16 to Form 10-K dated
December 31, 1995 is hereby incorporated herein by reference as
exhibit 10.16.

10.17 Amended and Restated Agreement of Limited Partnership of Walnut Turn
Associates, Ltd. filed as exhibit 10.17 to Form 10-K dated December
31, 1995 is hereby incorporated herein by reference as exhibit 10.17.

10.18 Amended and Restated Agreement of Limited Partnership of Pioneer
Street Associates, a California limited partnership filed as exhibit
10.1 to Form 8-K dated July 5, 1995 is hereby incorporated herein by
reference as exhibit 10.18.

10.19 Certified financial statements of Pioneer Street Associates, a Cali-
fornia Limited Partnership as of and for the year ended December 31,
1999.

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

38

Report of Independent Certified Public Accountants on
Financial Statement Schedules

To the Partners
WNC Housing Tax Credit Fund IV, L.P., Series 2

The audits referred to in our report dated August 16, 2000, relating to the
2000, 1999 and 1998 financial statements of WNC Housing Tax Credit Fund IV,
L.P., Series 2 (the "Partnership"), which is contained in Item 8 of this Form
10-K, included the audit of the accompanying financial statement schedules. The
financial statement schedules are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statement schedules based upon our audits. The opinion to the financial
statements contains an audit scope limitation paragraph describing the inability
of the auditors to express an opinion on the financial statements of a limited
partnership.

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

/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP

Orange County, California
August 16, 2000

39

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000

-------------------------------- -------------------------------------------------------
As of March 31, 2000 As of December 31, 1999
-------------------------------- -------------------------------------------------------
Partnership's Total Amount of Encumbrances of Property
Investment in Local Investment Local Limited and Accumulated Net Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Brewton,
East Brewton, Ltd. Alabama $ 1,192,000 $1,192,000 $ 1,150,000 $ 2,339,000 $ 74,000 $ 2,265,000

Autumn Trace Associates, Silsbee, Texas 412,000 412,000 1,261,000 2,059,000 469,000 1,590,000
Ltd.

Broken Bow Apartments I, Broken Bow,
Limited Partnership Nebraska 608,000 608,000 * * * *

Candleridge Apartments Waukee, Iowa 125,000 125,000 682,000 883,000 141,000 742,000
of Waukee L.P. II

Chadwick Limited Edan, North
Partnership Carolina 378,000 378,000 1,561,000 2,010,000 253,000 1,757,000

Comanche Retirement Comanche, Texas 136,000 136,000 592,000 748,000 138,000 610,000
Village, Ltd.

Crossings II Limited Portage,
Dividend Housing Michigan 432,000 432,000 5,992,000 6,952,000 470,000 6,482,000
Association Limited
Partnership

EW, a Wisconsin Limited Evansville,
Partnership Wisconson 164,000 164,000 619,000 869,000 189,000 680,000

Garland Street Limited Malvarn,
Partnership Arkansas 164,000 164,000 696,000 920,000 200,000 720,000

Hereford Seniors Hereford,
Community, Ltd. Texas 167,000 167,000 802,000 1,005,000 117,000 888,000

* Results of Broken Bow Apartments I, L.P. and Sidney Apartments I, L.P. have
not been audited and thus have been excluded. See Note 2 to the financial
statements and report of certified public accountants.

40

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000

---------------------------------- ------------------------------------------------------
As of March 31, 2000 As of December 31, 1999
---------------------------------- ------------------------------------------------------
Partnership's Total Amount of Encumbrances of Property
Investment in Local Investment Local Limited and Accumulated Net Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Hickory Lane Newton, Texas 174,000 174,000 596,000 924,000 128,000 796,000
Associates, Ltd

Honeysuckle Court Vidor, Texas $ 339,000 $ 339,000 $ 1,165,000 $ 1,780,000 $ 258,000 $ 1,522,000
Associates, Ltd.

Klimpel Manor, Ltd Fullerton,
California 1,774,000 1,774,000 1,962,000 3,576,000 543,000 3,033,000

Lamesa Seniors Lamesa, Texas 143,000 143,000 673,000 818,000 133,000 685,000
Community, Ltd.

Laredo Heights Navasota, Texas 225,000 225,000 995,000 1,350,000 138,000 1,212,000
Apartments Ltd.

Mountainview Apartments North Wilkesboro,
Limited Partnership North Carolina 195,000 195,000 998,000 1,211,000 292,000 919,000

Palestine Seniors Palestine, Texas 225,000 225,000 1,128,000 1,385,000 198,000 1,187,000
Community, Ltd.

Pecan Grove Limited Forrest City,
Partnership Arkansas 240,000 240,000 1,114,000 1,401,000 312,000 1,089,000

Pioneer Street Bakersfield,
Associates California 2,222,000 2,222,000 1,883,000 4,087,000 729,000 3,358,000

Sidney Apartments I, Sidney, Nebraska 530,000 530,000 * * * *
Limited Partnership

Southcove Associates Orange Cove,
Califonia 2,000,000 2,000,000 1,532,000 3,445,000 626,000 2,819,000

Walnut Turn Associates, Buna, Texas 188,000 188,000 690,000 1,015,000 143,000 872,000
Ltd. ---------- ---------- ---------- ---------- --------- ----------
$12,033,000 $12,033,000 $26,091,000 $38,777,000 $5,551,000 $33,226,000
========== ========== ========== ========== ========= ==========

41

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000

-----------------------------------------------------------------------------------
For the year ended December 31, 1999
-----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Apartment Housing of East
Brewton, Ltd. $ 91,000 $ (78,000) 1998 Completed 40 Years

Autumn Trace Associates, Ltd. 204,000 (50,000) 1994 Completed 27.5 Years

Broken Bow Apartments I, Limited
Partnership * * 1996 Completed 40 Years

Candleridge Apartments of Waukee
L.P. II 120,000 (10,000) 1995 Completed 27.5 Years

Chadwick Limited Partnership 188,000 (62,000) 1994 Completed 50 Years

Comanche Retirement Village, Ltd. 68,000 (15,000) 1994 Completed 30 Years

Crossings II Limited Dividend
Housing Association Limited
Partnership 665,000 (140,000) 1997 Completed 40 Years

EW, a Wisconsin Limited
Partnership 99,000 (31,000) 1994 Completed 27.5 Years

Garland Street Limited
Partnership 66,000 (29,000) 1994 Completed 27.5 Years

Hereford Seniors Community, Ltd. 93,000 (5,000) 1995 Completed 40 Years

Hickory Lane Associates, Ltd 115,000 (16,000) 1995 Completed 27.5 Years

Honeysuckle Court Associates,
Ltd. 194,000 (23,000) 1995 Completed 27.5 Years

Klimpel Manor, Ltd 362,000 (74,000) 1994 Completed 40 Years

Lamesa Seniors Community, Ltd. 81,000 (11,000) 1994 Completed 40 Years

Laredo Heights Apartments Ltd. 146,000 (3,000) 1996 Completed 45 Years

Mountainview Apartments Limited
Partnership 93,000 (13,000) 1994 Completed 40 Years

42

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2000

-----------------------------------------------------------------------------------
For the year ended December 31, 1999
-----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Palestine Seniors Community, Ltd. 142,000 5,000 1994 Completed 40 Years

Pecan Grove Limited Partnership 120,000 (42,000) 1994 Completed 27.5 Years

Pioneer Street Associates 482,000 (54,000) 1995 Completed 27.5 Years

Sidney Apartments I, Limited
Partnership * * 1996 Completed 40 Years

Southcove Associates 213,000 (109,000) 1994 Completed 27.5 Years

Walnut Turn Associates, Ltd. 90,000 (29,000) 1995 Completed 27.5 Years
---------- ------------

$ 3,632,000 $ (789,000)
========== ============

43

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1999

-------------------------------- -------------------------------------------------------
As of March 31, 1999 As of December 31, 1998
-------------------------------- -------------------------------------------------------
Partnership's Total Amount of Encumbrances of Property
Investment in Local Investment Local Limited and Accumulated Net Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Brewton,
East Brewton, Ltd. Alabama $ 1,255,000 $ 941,000 $ 1,011,000 $ 1,961,000 $ - $ 1,961,000

Autumn Trace Associates, Silsbee, Texas 412,000 412,000 1,269,000 2,059,000 394,000 1,665,000
Ltd.

Broken Bow Apartments I, Broken Bow,
Limited Partnership Nebraska 608,000 546,000 750,000 1,383,000 49,000 1,334,000

Candleridge Apartments Waukee, Iowa 125,000 125,000 685,000 873,000 112,000 761,000
of Waukee L.P. II

Chadwick Limited Edan, North
Partnership Carolina 378,000 378,000 1,571,000 2,011,000 207,000 1,804,000

Comanche Retirement Comanche, Texas 136,000 136,000 594,000 748,000 97,000 651,000
Village, Ltd.

Crossings II Limited Portage,
Dividend Housing Michigan 432,000 432,000 6,074,000 6,952,000 273,000 6,679,000
Association Limited
Partnership

EW, a Wisconsin Limited Evansville,
Partnership Wisconson 164,000 164,000 628,000 869,000 156,000 713,000

Garland Street Limited Malvarn,
Partnership Arkansas 164,000 164,000 699,000 918,000 164,000 754,000

Hereford Seniors Hereford,
Community, Ltd. Texas 167,000 167,000 804,000 1,006,000 94,000 912,000

Hickory Lane Newton, Texas 174,000 174,000 597,000 924,000 97,000 827,000
Associates, Ltd

44

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999

---------------------------------- ------------------------------------------------------
As of March 31, 1999 As of December 31, 1998
---------------------------------- ------------------------------------------------------
Partnership's Total Amount of Encumbrances of Property
Investment in Local Investment Local Limited and Accumulated Net Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Honeysuckle Court Vidor, Texas $ 339,000 $ 339,000 $ 1,168,000 $ 1,780,000 $ 195,000 $ 1,585,000
Associates, Ltd.

Klimpel Manor, Ltd Fullerton,
California 1,774,000 1,774,000 1,984,000 3,576,000 437,000 3,139,000

Lamesa Seniors Lamesa, Texas 143,000 143,000 675,000 818,000 114,000 704,000
Community, Ltd.

Laredo Heights Navasota, Texas 225,000 225,000 1,001,000 1,349,000 98,000 1,251,000
Apartments Ltd.

Mountainview Apartments North Wilkesboro,
Limited Partnership North Carolina 195,000 195,000 1,002,000 1,211,000 140,000 1,071,000

Palestine Seniors Palestine, Texas 225,000 225,000 1,132,000 1,384,000 164,000 1,220,000
Community, Ltd.

Pecan Grove Limited Forrest City,
Partnership Arkansas 240,000 240,000 1,118,000 1,397,000 250,000 1,147,000

Pioneer Street Bakersfield,
Associates California 2,222,000 2,222,000 1,903,000 4,086,000 581,000 3,505,000

Sidney Apartments I, Sidney, Nebraska 530,000 484,000 444,000 1,419,000 100,000 1,319,000
Limited Partnership

Southcove Associates Orange Cove,
Califonia 2,000,000 2,000,000 1,538,000 3,445,000 500,000 2,945,000

Walnut Turn Associates, Buna, Texas 188,000 188,000 692,000 1,015,000 108,000 907,000
Ltd. ---------- ---------- ---------- ---------- --------- ----------
$12,096,000 $11,674,000 $27,339,000 $41,184,000 $4,330,000 $36,854,000
========== ========== ========== ========== ========= ==========

45

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999

-----------------------------------------------------------------------------------
For the year ended December 31, 1998
-----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Not
Brewton, Ltd. $ - $ - 1998 Est. 1999 Determined

Autumn Trace Associates, Ltd. 206,000 (43,000) 1994 Completed 27.5 Years

Broken Bow Apartments I, Limited
Partnership 39,000 (117,000) 1996 Completed 40 Years

Candleridge Apartments of Waukee
L.P. II 116,000 (8,000) 1995 Completed 27.5 Years

Chadwick Limited Partnership 188,000 (18,000) 1994 Completed 50 Years

Comanche Retirement Village, Ltd. 63,000 (21,000) 1994 Completed 30 Years

Crossings II Limited Dividend
Housing Association Limited
Partnership 692,000 (19,000) 1997 Completed 40 Years

EW, a Wisconsin Limited
Partnership 105,000 (20,000) 1994 Completed 27.5 Years

Garland Street Limited
Partnership 66,000 (26,000) 1994 Completed 27.5 Years

Hereford Seniors Community, Ltd. 89,000 (7,000) 1995 Completed 40 Years

Hickory Lane Associates, Ltd 81,000 (13,000) 1995 Completed 27.5 Years

Honeysuckle Court Associates,
Ltd. 191,000 (18,000) 1995 Completed 27.5 Years

Klimpel Manor, Ltd 344,000 (85,000) 1994 Completed 40 Years

Lamesa Seniors Community, Ltd. 84,000 (8,000) 1994 Completed 40 Years

Laredo Heights Apartments Ltd. 166,000 (9,000) 1996 Completed 45 Years

Mountainview Apartments Limited
Partnership 90,000 (11,000) 1994 Completed 40 Years

46

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 1999

-----------------------------------------------------------------------------------
For the year ended December 31, 1998
-----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Palestine Seniors Community, Ltd. 135,000 (1,000) 1994 Completed 40 Years

Pecan Grove Limited Partnership 114,000 (46,000) 1994 Completed 27.5 Years

Pioneer Street Associates 507,000 (37,000) 1995 Completed 27.5 Years

Sidney Apartments I, Limited
Partnership 77,000 (42,000) 1996 Completed 40 Years

Southcove Associates 218,000 (102,000) 1994 Completed 27.5 Years

Walnut Turn Associates, Ltd. 129,000 (17,000) 1995 Completed 27.5 Years
------------ -----------
$ 3,700,000 $ (668,000)
============ ===========

47

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998

-----------------------------------------------------------------------------------------
As of December 31, 1998
-----------------------------------------------------------------------------------------
Partnership's Total Amount of Encumbrances of Property
Investment in Local Investment Local Limited and Accumulated Net Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Brewton,
East Brewton, Ltd. Alabama $ 1,255,000 $ 828,000 $ 1,011,000 $ 1,961,000 $ - $ 1,961,000

Autumn Trace Associates, Silsbee, Texas 412,000 412,000 1,269,000 2,059,000 394,000 1,665,000
Ltd.

Broken Bow Apartments I, Broken Bow,
Limited Partnership Nebraska 608,000 546,000 750,000 1,383,000 49,000 1,334,000

Candleridge Apartments Waukee, Iowa 125,000 125,000 685,000 873,000 112,000 761,000
of Waukee L.P. II

Chadwick Limited Edan, North
Partnership Carolina 378,000 378,000 1,571,000 2,011,000 207,000 1,804,000

Comanche Retirement Comanche, Texas 136,000 136,000 594,000 748,000 97,000 651,000
Village, Ltd.

Crossings II Limited Portage,
Dividend Housing Michigan 432,000 361,000 6,074,000 6,952,000 273,000 6,679,000
Association Limited
Partnership

EW, a Wisconsin Limited Evansville,
Partnership Wisconson 164,000 164,000 628,000 869,000 156,000 713,000

Garland Street Limited Malvarn,
Partnership Arkansas 164,000 164,000 699,000 918,000 164,000 754,000

Hereford Seniors Hereford,
Community, Ltd. Texas 167,000 167,000 804,000 1,006,000 94,000 912,000

Hickory Lane Newton, Texas 174,000 174,000 597,000 924,000 97,000 827,000
Associates, Ltd

48

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998

------------------------------------------------------------------------------------------
As of December 31, 1998
------------------------------------------------------------------------------------------
Partnership's Total Amount of Encumbrances of Property
Investment in Local Investment Local Limited and Accumulated Net Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Honeysuckle Court Vidor, Texas $ 339,000 $ 339,000 $ 1,168,000 $ 1,780,000 $ 195,000 $ 1,585,000
Associates, Ltd.

Klimpel Manor, Ltd Fullerton,
California 1,774,000 1,774,000 1,984,000 3,576,000 437,000 3,139,000

Lamesa Seniors Lamesa, Texas 143,000 143,000 675,000 818,000 114,000 704,000
Community, Ltd.

Laredo Heights Navasota, Texas 225,000 225,000 1,001,000 1,349,000 98,000 1,251,000
Apartments Ltd.

Mountainview Apartments North Wilkesboro,
Limited Partnership North Carolina 195,000 195,000 1,002,000 1,211,000 140,000 1,071,000

Palestine Seniors Palestine, Texas 225,000 225,000 1,132,000 1,384,000 164,000 1,220,000
Community, Ltd.

Pecan Grove Limited Forrest City,
Partnership Arkansas 240,000 240,000 1,118,000 1,397,000 250,000 1,147,000

Pioneer Street Bakersfield,
Associates California 2,222,000 2,222,000 1,903,000 4,086,000 581,000 3,505,000

Sidney Apartments I, Sidney, Nebraska 530,000 484,000 444,000 1,419,000 100,000 1,319,000
Limited Partnership

Southcove Associates Orange Cove,
Califonia 2,000,000 2,000,000 1,538,000 3,445,000 500,000 2,945,000

Walnut Turn Associates, Buna, Texas 188,000 188,000 692,000 1,015,000 108,000 907,000
Ltd. ---------- ---------- ---------- ---------- --------- ----------
$12,096,000 $11,490,000 $27,339,000 $41,184,000 $4,330,000 $36,854,000
========== ========== ========== ========== ========= ==========

49

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998

-----------------------------------------------------------------------------------
For the year ended December 31, 1998
-----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Not
Brewton, Ltd. $ - $ - 1998 Est. 1999 Determined

Autumn Trace Associates, Ltd. 206,000 (43,000) 1994 Completed 27.5 Years

Broken Bow Apartments I, Limited
Partnership 39,000 (117,000) 1996 Completed 40 Years

Candleridge Apartments of Waukee
L.P. II 116,000 (8,000) 1995 Completed 27.5 Years

Chadwick Limited Partnership 188,000 (18,000) 1994 Completed 50 Years

Comanche Retirement Village, Ltd. 63,000 (21,000) 1994 Completed 30 Years

Crossings II Limited Dividend
Housing Association Limited
Partnership 692,000 (19,000) 1997 Completed 40 Years

EW, a Wisconsin Limited
Partnership 105,000 (20,000) 1994 Completed 27.5 Years

Garland Street Limited
Partnership 66,000 (26,000) 1994 Completed 27.5 Years

Hereford Seniors Community, Ltd. 89,000 (7,000) 1995 Completed 40 Years

Hickory Lane Associates, Ltd 81,000 (13,000) 1995 Completed 27.5 Years

Honeysuckle Court Associates,
Ltd. 191,000 (18,000) 1995 Completed 27.5 Years

Klimpel Manor, Ltd 344,000 (85,000) 1994 Completed 40 Years

Lamesa Seniors Community, Ltd. 84,000 (8,000) 1994 Completed 40 Years

Laredo Heights Apartments Ltd. 166,000 (9,000) 1996 Completed 45 Years

Mountainview Apartments Limited
Partnership 90,000 (11,000) 1994 Completed 40 Years

50

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
December 31, 1998

-----------------------------------------------------------------------------------
For the year ended December 31, 1998
-----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Palestine Seniors Community, Ltd. 135,000 (1,000) 1994 Completed 40 Years

Pecan Grove Limited Partnership 114,000 (46,000) 1994 Completed 27.5 Years

Pioneer Street Associates 507,000 (37,000) 1995 Completed 27.5 Years

Sidney Apartments I, Limited
Partnership 77,000 (42,000) 1996 Completed 40 Years

Southcove Associates 218,000 (102,000) 1994 Completed 27.5 Years

Walnut Turn Associates, Ltd. 129,000 (17,000) 1995 Completed 27.5 Years
------------ -----------
$ 3,700,000 $ (668,000)
============ ===========

51

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 HOUSING TAX CREDIT FUND IV, L.P., Series 2

By: WNC & Associates, Inc. General Partner

By: /s/ Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr.,
Chairman and Chief Executive Officer of WNC & Associates, Inc.

Date: September 28, 2000

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

Date: September 28, 2000

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, Jr.
Wilfred N. Cooper, Jr., Director of WNC & Associates, Inc.

Date: September 28, 2000

By: /s/ John B. Lester, Jr.
John B. Lester, Jr., Director of WNC & Associates, Inc.

Date: September 28, 2000

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

Date: September 28, 2000

52