WNC HOUSING TAX CREDIT FUND IV L P SERIES 1 - 10-K Annual Report

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FORM 10-K/A
AMENDMENT NO. 1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the fiscal year ended December 31, 1998

OR

[ ] 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: 0-26048

WNC HOUSING TAX CREDIT FUND IV, L.P., Series 1

California 33-0563307
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

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

(714) 662-5565

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

NONE

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

UNITS OF LIMITED PARTNERSHIP INTEREST

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

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

1

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 1 (the "Partnership") is a
California Limited Partnership formed under the laws of the State of California
on May 4, 1993. The Partnership was formed to acquire limited partnership
interests in limited partnerships or limited liability companies ("Local Limited
Partnerships") which own multifamily housing complexes that are eligible for
low-income housing federal and in certain cases, California income tax credits
("Low Income Housing Credits").

The general partner of the Partnership is WNC Tax Credit Partners IV, L.P. ("TCP
IV"). The general partner of TCP IV 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. The business of the Partnership is
conducted primarily through Associates as neither TCP IV nor the Partnership
have employees of their own.

Pursuant to a registration statement filed with the Securities and Exchange
Commission, on October 20, 1993, the Partnership commenced a public offering of
10,000 Units of Limited Partnership Interest ("Units"), at a price of $1,000 per
Unit. The Partnership's offering terminated on July 19, 1994. A total of 10,000
Limited Partnership Interests representing $10,000,000 had been sold. Holders of
Limited Partnership Interests are referred to herein as "Limited Partners."

Description of Business

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

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

3

As of December 31, 1998, the Partnership had invested in twenty-one 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 make its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local Limited Partnerships. The value of the
Partnership's investments will be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that the anticipated Low Income
Housing Credits will be available to Limited Partners.

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

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

Item 2. Properties

Through its investments in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the twenty-one Housing Complexes as of December 31, 1998
and for the periods indicated:

4

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

Alpine Manor, Alpine, 1600 Capital Company,
L.P. Texas Inc. 36 94% $ 195,000 $ 195,000 $ 394,000 $ 920,000

Baycity Village Baytown, Green Companies
Apartments, Texas Development Group, Inc. 62 97% 301,000 301,000 629,000 1,489,000
Limited
Partnership

Beckwood Manor Marianna, Phillips Development
Seven Limited Arkansas Corporation 42 100% 307,000 307,000 636,000 1,395,000
Partnership

Briscoe Manor Galena, McKnight & Decoster,
Limited Maryland Inc. 31 100% 308,000 308,000 648,000 1,521,000
Partnership

Evergreen Four Maynard, Phillips Development
Limited Arkansas Corporation 24 75% 195,000 195,000 402,000 873,000
Partnership

Fawn Haven Manchester, Georg E. Maharg and
Limited Ohio Maharg Realty, Inc. 28 93% 167,000 167,000 376,000 862,000
Partnership

Fort Stockton Ft. 1600 Capital Company,
Manor, Stockton, Inc. 36 86% 224,000 224,000 453,000 1,059,000
L.P. Texas

Hidden Valley Gallup, New Alan Deke Noftsker 40 93% 412,000 412,000 801,000 1,491,000
Limited Mexico
Partnership

HOI Limited Lenoir, Housing Opportunities, 34 100% 198,000 198,000 400,000 572,000
Partnership North Inc.
Of Lenoir Carolina

Indian Creek Bucyrus, Georg E. Maharg 48 96% 306,000 306,000 637,000 1,542,000
Limited Ohio
Partnership

Laurel Creek San Luis San Luis Obispo
Apartments Obispo, Non-Profit Housing Corp. 24 100% 1,030,000 1,030,000 2,103,000 681,000
California

Madisonville Madisonville, Jean Johnson 32 100% 174,000 174,000 375,000 905,000
Manor Senior Texas
Citizens
Complex, Ltd.

5

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

Mt. Graham Safford, Rural Housing, Inc. 40 98% $ 410,000 $ 410,000 $ 788,000 $ 1,416,000
Housing, Ltd. Arizona

Northside Angleton, Jean Johnson 48 100% 282,000 282,000 607,000 1,369,000
Plaza Texas
Apartments,
Ltd.

Pampa Manor, Pampa, 1600 Capital Company,
L.P. Texas Inc. 32 84% 180,000 180,000 363,000 849,000

Regency Court Monrovia, Community Housing
Partners California Assistance Program,
Inc., a California
Nonprofit Corporation 115 98% 1,692,000 1,690,000 - 5,283,000

Sandpiper Aulander, I. Norwood Stone 24 96% 219,000 219,000 433,000 953,000
Square, a North
Limited Carolina
Partnership

Seneca Falls Seneca David R. Bacon and
East Falls, New Frank Salvatore 32 97% 276,000 253,000 106,000 896,000
Apartments York
Company II,
L.P.

Vernon Manor, Vernon, 1600 Capital Company,
L.P. Texas Inc. 28 100% 161,000 161,000 325,000 786,000

Waterford Calhoun Thomas E. Connelly,
Place, a Falls, South Jr., TEC Rental
Limited Carolina Properties Inc., Warren
Partnership H. Abernathy, II and
Solid South, Inc. 32 100% 272,000 272,000 549,000 1,189,000

Yantis Housing, Yantis, Charles Cannon Jr. 24 100% 145,000 145,000 287,000 633,000
Ltd. Texas --- ----- --------- --------- ---------- ----------
812 96% $ 7,454,000 $ 7,429,000 $ 11,312,000 $ 26,684,000
=== ===== ========= ========= ========== ==========

6

--------------------------------------------
For the year ended December 31, 1998
--------------------------------------------
Net Low Income Housing
Rental Income Credits Allocated
Partnership Name Income (loss) to Partnership
- --------------------------------------------------------------------------------

Alpine Manor, L.P. $ 104,000 $ (19,000) 99%

Baycity Village Apartments,
Limited Partnership 260,000 (48,000) 99%

Beckwood Manor Seven
Limited Partnership 142,000 (49,000) 95%

Briscoe Manor Limited Partnership 156,000 (57,000) 99%

Evergreen Four Limited Partnership 68,000 (39,000) 95%

Fawn Haven Limited Partnership 78,000 (26,000) 99%

Fort Stockton Manor, L.P. 109,000 (21,000) 99%

Hidden Valley Limited Partnership 149,000 (32,000) 99%

HOI Limited Partnership Of Lenoir 119,000 (45,000) 99%

Indian Creek Limited Partnership 136,000 (48,000) 99%

Laurel Creek Apartments 164,000 (22,000) 99%

Madisonville Manor Senior Citizens
Complex, Ltd. 105,000 (4,000) 99%

Mt. Graham Housing, Ltd. 147,000 (59,000) 99%

Northside Plaza Apartments, Ltd. 142,000 (12,000) 99%

Pampa Manor, L.P. 104,000 (15,000) 99%

Regency Court Partners 646,000 (224,000) 99%

Sandpiper Square, a Limited
Partnership 92,000 (21,000) 99%

Seneca Falls East Apartments
Company II, L.P. 124,000 9,000 99.98%

Vernon Manor, L.P. 84,000 (31,000) 99%

Waterford Place, a Limited
Partnership 120,000 (25,000) 99%

Yantis Housing, Ltd. 73,000 (11,000) 99%
--------- ---------
$ 3,122,000 $ (799,000)
========= =========

7

Item 3. Legal Proceedings

NONE.

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

NONE.

PART II.

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

Item 5a.

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

(b) At December 31, 1998, there were 727 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 1998.

Item 5b.

NOT APPLICABLE

Item 6. Selected Financial Data

Selected balance sheet information for the Partnership is as follows as of
December 31:

1998 1997 1996 1995 1994
---- ---- ---- ---- ----

ASSETS

Cash and cash equivalents $ 389,536 $ 778,448 $ 997,025 $ 1,410,867 $ 2,107,761
Investments in limited
partnerships, net 4,495,621 4,976,247 5,771,116 6,928,034 7,852,303
Due from affiliate - - 9,020 - 409,286
Other assets - 3,000 6,986 16,239 21,900
--------- --------- --------- --------- ----------
$ 4,885,157 $ 5,757,695 $ 6,784,147 $ 8,355,140 $ 10,391,250
========= ========= ========= ========= ==========

LIABILITIES
Due to limited partnerships $ 25,301 $ 84,303 $ 256,610 $ 799,745 $ 2,289,218
Accrued fees and expenses
due to general partner
and affiliates 106,500 65,235 91,982 65,438 75,820

PARTNERS' EQUITY 4,753,356 5,608,157 6,435,555 7,489,957 8,026,212
--------- --------- --------- --------- ----------
$ 4,885,157 $ 5,757,695 $ 6,784,147 $ 8,355,140 $10,391,250
========= ========= ========= ========= ==========

8

Selected results of operations, cash flows and other information for the
Partnership are as follows for the years ended December 31:

1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Income(loss) from

operations $ (126,723) $ (62,968) $ (30,845) $ (17,817) $ 17,315
Equity in losses from
limited partnerships (728,078) (764,430) (1,023,557) (727,986) (413,316)
--------- --------- ---------- --------- ---------
Net loss $ (854,801) $ (827,398) $ (1,054,402) $ (745,803) $ (396,001)
========= ========= ========== ========= =========
Net loss allocated to:
General partner $ (8,548) $ (8,274) $ (10,544) $ (7,458) $ (3,960)
========= ========= ========== ========= =========
Limited partners $ (846,253) $ (819,124) $ (1,043,858) $ (738,345) $ (392,041)
========= ========= ========== ========= =========
Net loss per limited
partner unit $ (84.63) $ (81.91) $ (104.39) $ (73.83) $ (50.35)
========= ========= ========== ========= =========
Outstanding weighted
limited partner units 10,000 10,000 10,000 10,000 7,787
========= ========= ========== ========= =========

1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Net cash provided by
(used in):
Operating activities $ (54,089) $ (51,546) $ 22,420 $ 55,437 $ 46,649
Investing activities (334,823) (170,284) (437,806) (914,830) (5,053,552)
Financing activities - 3,253 1,544 162,499 7,113,635
--------- --------- ---------- --------- ---------
Net change in cash
and cash equivalents (388,912) (218,577) (413,842) (696,894) 2,106,732
Cash and cash
equivalents,
beginning of period 778,448 997,025 1,410,867 2,107,761 1,029
--------- --------- --------- --------- ---------
Cash and cash
equivalents, end of
period $ 389,536 $ 778,448 $ 997,025 $ 1,410,867 $ 2,107,761
========= ========= ========= ========= =========

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

1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Federal $ 142 $ 143 $ 136 $ 101 $ 36
State - - - - -
--------- --------- --------- --------- ---------
Total $ 142 $ 143 $ 136 $ 101 $ 36
========= ========= ========= ========= =========

9

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

Financial Condition

The Partnership's assets at December 31, 1998 consisted primarily of $390,000 in
cash and aggregate investments in the twenty-one Local Limited Partnerships of
$4,496,000. Liabilities at December 31, 1998 were $132,000, of which $102,000
was accrued annual management fees, $5,000 was for expenses paid by an affiliate
of the General Partner due to the General Partner or affiliate and $25,000 was
payables to limited partnerships.

Results of Operations

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. The
Partnership's net loss for 1998 was $(855,000), reflecting an increase of
$28,000 from the net loss experienced in 1997. The increase in net loss is
primarily due to operating expenses which increased to $(83,000) in 1998 from
$(17,000) in 1997, partially offset by a decrease in equity in losses from
limited partnerships of $36,000, because the investments in certain Local
Limited Partnerships reached $0 during 1998.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. The
Partnership's net loss for 1997 was $(827,000), reflecting a decrease of
$227,000 from the net loss experienced in 1996. The decrease in net loss is
primarily due to equity in losses from limited partnerships which decreased to
$(764,000) in 1997 from $(1,024,000) in 1996 was partially offset by a decrease
in interest income of $26,000 and an increase in operating expenses of $6,000 in
1998.

Cash Flows

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. Net cash
used in 1998 was $(389,000), compared to net cash used in 1997 of $(219,000).
The change was due primarily to an increase in cash used for investments in
limited partnerships of $163,000, an increase in operating costs paid to third
parties of $65,000, a decrease in distributions from Local Limited Partnerships
of $2,000, partially offset by a decrease in cash paid to the General Partner
and affiliates of $60,000.

Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. Net cash
used in 1997 was $(219,000), compared to $(414,000) in 1996. The change was due
primarily to a decrease in cash used for investments in limited partnerships of
$270,000, partially offset by an increase in cash paid to the General Partner
and affiliates of $36,000, a decrease in interest income of $26,000, a decrease
in interest receivable collected of $5,000, an increase in operating costs paid
to third parties of $6,000, and a decrease in distributions from Local Limited
Partnerships of $2,000.

The Partnership expects its future cash flows, together with its net available
assets at December 31, 1998, to be sufficient to meet all currently forseeable
future cash requirements.

Impact of Year 2000

WNC & Associates, Inc.

Status of Readiness

Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its ultimate 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.

10

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. Except for one telephone system, the non-IT
systems of WNC are year 2000 compliant. The one telephone system will require
the replacement of one computer and one software application, both of which will
be completed on or before October 1, 1999.

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. There can be no assurance that this
compliance information is correct. There also can be no assurance that the
systems of other, less-important service providers and outside vendors will be
year 2000 compliant.

Costs to Address Year 2000 Issues

The cost to address year 2000 issues for WNC has been less than $20,000. The
cost to replace the telephone system noted above will be less than $5,000. The
cost to deal with potential year 2000 issues of other outside vendors cannot be
estimated at this time.

Risk of Year 2000 Issues

The most reasonable and likely result from non-year 2000 compliance of systems
of the service providers noted above will be the disruption of normal business
operations for WNC. This disruption would, 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

WNC is in the process of obtaining year 2000 certifications from each Local
General Partner of each Local Limited Partnership. Those certifications will
represent to the Partnership that the IT and non-IT systems critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT systems of property management companies, independent
accountants, electrical power providers, financial institutions and
telecommunications carriers used by the Local Limited Partnership are year 2000
compliant.

11

There can be no assurance that the representations in the certifications will be
correct. There also can be no assurance that the systems of other,
less-important service providers and outside vendors, upon which the Local
Limited Partnerships rely, will be year 2000 compliant.

Costs to Address Year 2000 Issues

There will be no cost to the Partnership as a result of assessing year 2000
issues for the Local Limited Partnerships. The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.

Risk of Year 2000 Issues

There may be Local General Partners who indicate that they or their property
management company are not year 2000 compliant and do not have plans to become
year 2000 compliant before the end of 1999. There may be other Local General
Partners who are unwilling to respond to the certification request. The most
likely result of either non-compliance or failure to respond will be the removal
and replacement of the property management company and/or the Local General
Partner with year 2000 compliant operators.

Despite the efforts to obtain certifications, 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

12

WNC HOUSING TAX CREDIT FUND, IV, L.P., SERIES 1
(A California Limited Partnership)

FINANCIAL STATEMENTS

For The Years Ended December 31, 1998, 1997 and 1996

with

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

13

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
WNC Housing Tax Credit Fund IV, L.P., Series 1

We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund
IV, L.P., Series 1 (a California Limited Partnership) (the "Partnership") as of
December 31, 1998, and the related statements of operations, partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. 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 2 to the financial
statements, the Partnership accounts for its investments in limited partnerships
using the equity method. The portion of the Partnership's investment in limited
partnerships audited by other auditors represented 61% of the total assets of
the Partnership at December 31, 1998. Our opinion, insofar as it relates to the
amounts included in the financial statements for the limited partnerships which
were audited by others, is based solely on the reports of the other auditors.

We conducted our audit 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 audit and the reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of WNC Housing Tax Credit Fund IV, L.P., Series 1 (a
California Limited Partnership) as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

BDO SEIDMAN, LLP

Orange County, California
April 5, 1999

14

INDEPENDENT AUDITORS' REPORT

To the Partners
WNC Housing Tax Credit Fund IV, L.P., Series 1

We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund
IV, L.P., Series 1 ( a California Limited Partnership) (the "Partnership") as of
December 31, 1997, and the related statements of operations, partners' equity
(deficit) and cash flows for each of the years in the two-year period 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 1 is a limited partner. These investments, as discussed in Note 3
to the financial statements, are accounted for by the equity method. The
financial statements of substantially all of the limited partnerships,
representing 87% of the total assets of WNC Housing Tax Credit Fund IV, L.P.,
Series 1 at December 31, 1997, 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 financial position of WNC Housing Tax Credit Fund IV, L.P., Series 1 (a
California Limited Partnership) as of December 31, 1997, and the results of its
operations and its cash flows for each of the years in the two-year period ended
December 31, 1997, in conformity with generally accepted accounting principles.

CORBIN & WERTZ

Irvine, California
April 23, 1998, except for Notes 2 and 6
which are dated as of December 4, 1998

15

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

BALANCE SHEETS

December 31, 1998 and 1997

1998 1997
---- ----
ASSETS

Cash and cash equivalents $ 389,536 $ 778,448
Investments in limited
partnerships (Notes 2 and 6) 4,495,621 4,976,247
Other assets - 3,000
------------ -------------
$ 4,885,157 $ 5,757,695
============ =============

LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)

Liabilities:
Payables to limited partnerships
(Notes 4 and 6) $ 25,301 $ 84,303
Accrued fees and advances due
to General Partner and
affiliate (Note 3) 106,500 65,235
------------ -------------
Total liabilities 131,801 149,538
------------ -------------
Commitments and contingencies
(Note 6) - -

Partners' equity (deficit):
General partner (52,367) (43,819)
Limited partners (10,000 units
authorized - 10,000 units
outstanding at December 31, 1998
and 1997) 4,805,723 5,651,976
------------ -------------
Total partners' equity 4,753,356 5,608,157
------------ -------------
$ 4,885,157 $ 5,757,695
============ =============

See accompanying notes to financial statements
16

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

STATEMENTS OF OPERATIONS

For The Years Ended December 31, 1998, 1997 and 1996

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

Interest income $ 27,708 $ 25,676 $ 51,654
--------- --------- ---------

Operating expenses:
Amortization 31,369 31,416 31,032
Asset management fees (Note 3) 40,000 40,000 40,000
Other 83,062 17,228 11,467
--------- --------- ---------
Total operating expenses 154,431 88,644 82,499
--------- --------- ---------
Loss from operations (126,723) (62,968) (30,845)
Equity in losses from limited
partnerships (Note 2) (728,078) (764,430) (1,023,557)
--------- --------- ---------
Net loss $ (854,801) $ (827,398) $ (1,054,402)
========= ========= =========
Net loss allocated to:
General partner $ (8,548) $ (8,274) $ (10,544)
========= ========= =========

Limited partners $ (846,253) $ (819,124) $ (1,043,858)
========= ========= =========
Net loss per limited
partner unit $ (84.63) $ (81.91) $ (104.39)
========= ========= =========

Outstanding weighted limited
partner units 10,000 10,000 10,000
========= ========= =========

See accompanying notes to financial statements
17

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

For The Years Ended December 31, 1998, 1997 and 1996

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

Partners' equity (deficit)
at January 1, 1996 $ (25,001) $ 7,514,958 $ 7,489,957

Net loss (10,544) (1,043,858) (1,054,402)
----------- ----------- -----------

Partners' equity (deficit)
at December 31, 1996 (35,545) 6,471,100 6,435,555

Net loss (8,274) (819,124) (827,398)
----------- ----------- -----------

Partners' equity (deficit)
at December 31, 1997 (43,819) 5,651,976 5,608,157

Net loss (8,548) (846,253) (854,801)
----------- ----------- -----------

Partners' equity (deficit)
at December 31, 1998 $ (52,367) $ 4,805,723 $ 4,753,356
=========== =========== ===========

See accompanying notes to financial statements
18

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS

For The Years Ended December 31, 1998, 1997 and 1996

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

Cash flows from operating activities:

Net loss $ (854,801) $ (827,398) $ (1,054,402)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Amortization 31,369 31,416 31,032
Equity in losses from limited partnerships 728,078 764,430 1,023,557
Change in accrued fees and expenses due
to General Partner and affiliates 41,265 (30,000) 25,000
Change in receivable from affiliate - 9,020 (9,020)
Change in other assets - 986 6,253
---------- ---------- ----------

Net cash (used in) provided by
operating activities (54,089) (51,546) 22,420
---------- ---------- ----------

Cash flows from investing activities:
Investments in limited partnerships, net (335,059) (172,307) (442,379)
Capitalized acquisition costs and fees (5,789) (5,502) (5,502)
Distributions from limited partnerships 6,025 7,525 10,075
---------- ---------- ----------

Net cash used in investing activities (334,823) (170,284) (437,806)
---------- ---------- ----------

Cash flows from financing activities:
Changes from advances from general partner
and affiliates for:
Other - 3,253 1,544
---------- ---------- ----------

Net cash provided by financing activities - 3,253 1,544
---------- ---------- ----------

Net decrease in cash and cash equivalents (388,912) (218,577) (413,842)

Cash and cash equivalents, beginning of year 778,448 997,025 1,410,867
---------- ---------- ----------

Cash and cash equivalents, end of year $ 389,536 $ 778,448 $ 997,025
========== ========== ==========

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

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During the year ended December 31, 1998, the Partnership incurred, but did
not pay, $22,998 in payables to a limited partnership.

See accompanying notes to financial statements
19

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

WNC Housing Tax Credit Fund IV, L.P., Series 1, a California Limited Partnership
(the "Partnership"), was formed on May 4, 1993 under the laws of the state of
California, and commenced operations on October 20, 1993. The Partnership was
formed to invest primarily in other limited partnerships (the "Local Limited
Partnerships") which own and operate multi-family housing complexes (the
"Housing Complex") that are eligible for low income housing credits. The local
general partners (the "Local General Partners") of each Local Limited
Partnership retain responsibility for maintaining, operating and managing the
Housing Complex.

The general partner is WNC Tax Credit Partners, 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. is the original limited partner of the Partnership and owns, through
the Lester Family Trust, 28.6% 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 up to 10,000 units at $1,000
per Unit ("Units"). The offering of Units concluded in July 1994 at which time
10,000 Units in the amount of $10,000,000 had been accepted. The General Partner
has a 1% interest in operating profits and losses, taxable income and loss and
in cash available for distribution from the Partnership. The limited partners
will be allocated the remaining 99% of these items in proportion to their
respective investments.

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

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

20

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

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 in the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.

Method of Accounting for Investments in Limited Partnerships

The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 2).

Losses from limited partnerships allocated to the Partnership will not be
recognized to the extent that the investment balance would be adjusted below
zero.

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 limited partners' capital and amounted to $606,705 as of December
31, 1998 and 1997.

21

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

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 all investments with remaining maturities of three
months or less when purchased to be cash equivalents. There were no cash
equivalents at December 31, 1998 or 1997.

Concentration of Credit Risk

At December 31, 1998 and 1997, the Partnership maintained cash balances at
certain financial institutions 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 years
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 1998
presentation.

22

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

As of December 31, 1998, the Partnership had acquired limited partnership
interests in twenty-one Local Limited Partnerships, each of which owns one
housing complex consisting of an aggregate of 812 apartment units. As of
December 31, 1998, construction on all multifamily complexes was complete. The
respective general partners of the Local Limited Partnerships manage the day to
day operations of the entities. Significant Local Limited Partnership business
decisions require approval from the Partnership. The Partnership, as a limited
partner, is generally entitled to 99%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses of the Local Limited
Partnerships.

The Partnership's investments in Local Limited Partnerships as shown in the
balance sheets at December 31, 1998 and 1997 are approximately $776,000 and
$817,000, respectively, greater than the Partnership's equity as shown in the
Local Limited Partnerships' 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.

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.

During 1998, the investment accounts in certain Local Limited Partnerships have
reached a zero balance. Consequently, the Partnership's share of losses during
the year ended December 31, 1998 amounting to approximately $59,000 have not
been recognized.

Following is a summary of the equity method activity of the investments in Local
Limited Partnerships for the years ended December 31:

1998 1997
---- ----

Investments per balance sheet,
beginning of year $ 4,976,247 $ 5,771,116
Capital contributions to limited
partnerships, net 276,057 -
Distributions paid (6,025) (7,525)
Capitalized acquisition fees and costs 5,789 5,502
Equity in losses from limited
partnerships (728,078) (764,430)
Amortization of paid acquisition
fees and costs (28,369) (28,416)
--------------- ----------------

Investments per balance sheet,
end of year $ 4,495,621 $ 4,976,247
=============== ================

23

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

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

COMBINED CONDENSED BALANCE SHEETS

1998 1997
---- ----
ASSETS

Buildings and improvements,
net of accumulated depreciation
of $4,545,000 and $3,474,000 for
1998 and 1997, respectively $ 30,033,000 $ 30,271,000
Land 1,610,000 1,221,000
Due from related parties 31,000 13,000
Other assets 1,953,000 1,638,000
--------------- ----------------
$ 33,627,000 $ 33,143,000
=============== ================

LIABILITIES

Mortgage and construction
loans payable $ 26,684,000 $ 26,032,000
Other liabilities (including
due to related parties of
$957,000 and $751,000 as of
December 31, 1998 and 1997,
respectively) 1,985,000 1,714,000
--------------- ----------------

28,669,000 27,746,000
--------------- ----------------

PARTNERS' CAPITAL

WNC Housing Tax Credit Fund, L.P. 3,720,000 4,159,000
Other partners 1,238,000 1,238,000
--------------- ----------------

4,958,000 5,397,000
--------------- ----------------

$ 33,627,000 $ 33,143,000
=============== ================

24

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued

COMBINED CONDENSED STATEMENTS OF OPERATIONS

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

Revenues $ 3,222,000 $ 3,182,000 $ 3,004,000
-------------- -------------- --------------
Expenses:
Operating expenses 2,054,000 1,874,000 1,889,000
Interest expense 880,000 1,019,000 1,064,000
Depreciation and
amortization 1,087,000 1,064,000 1,087,000
-------------- -------------- --------------
Total expenses 4,021,000 3,957,000 4,040,000
-------------- -------------- --------------
Net loss $ (799,000) $ (775,000) $ (1,036,000)
============== ============== ==============
Net loss allocable to
Partnership $ (787,000) $ (764,000) $ (1,024,000)
============== ============== ==============
Net loss recorded by the
Partnership $ (728,000) $ (764,000) $ (1,024,000)
============== ============== ==============

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 Partners 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.

The financial statements of one Local Limited Partnership were prepared assuming
the limited partnership will continue as a going concern. The Partnership had a
$699,602 remaining investment in such Lower Tier Partnership at December 31,
1998. The Partnership's original investment in the Lower Tier Partnership
approximated $1,691,585. Through December 31, 1998, the limited partnership has
had recurring losses, working capital deficiencies and has not been billed for
certain property tax expenses due since 1994. The Local Limited Partnership is
seeking abatement or an extended payment plan to pay down certain of these
liabilities; however, if the Local Limited Partnership is unsuccessful,
additional funding may be requested from the Partnership. In the event the Local
Limited Partnership is required to liquidate or sell its property, the net
proceeds could be significantly less than the carrying value of such property.
As of December 31, 1998 and 1997, the carrying value of such property on the
books and records of the Lower Tier Partnership totaled $7,041,056 and
$7,232,514. The auditors for this entity have expressed substantial doubt as to
this entity's ability to continue as a going concern as a result of the property
tax issue.

In September 1996, the original general partners of this limited partnership
were removed. The Los Angeles County Housing Development Corporation ("LACHDC")
was named as the sole general partner. In September 1997, Community Housing
Assistance Program, Inc., a California nonprofit corporation replaced LACHDC as
the sole general partner.

25

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 3 - RELATED PARTY TRANSACTIONS

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

Acquisition fees of up to 8% of the gross proceeds from the sale of
Partnership units as compensation for services rendered in connection
with the acquisition of Local Limited Partnerships. As of December 31,
1998 and 1997 the Partnership incurred acquisition fees of $800,000.
Accumulated amortization of these capitalized costs was $123,968 and
$97,300 as of December 31, 1998 and 1997, 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
December 31, 1998 and 1997, the Partnership incurred acquisition costs
of $54,949 and $49,160, respectively, which have been included in
investments in limited partnerships. Accumulated amortization amounted
to $6,572 and $4,871 at December 31, 1998 and 1997, respectively.

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 partnerships allocable share of the
mortgages. Management fees of $40,000, $40,000 and $40,000 were
incurred for the years ended December 31, 1998, 1997 and 1996,
respectively, of which $0, $70,000 and $15,000 were paid during 1998,
1997 and 1996, 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.

An affiliate of the General Partner provides management services for
one of the properties in the limited partnerships. Management fees of
$38,348 and $9,519 were earned by the affiliate during 1998 and 1997,
respectively.

The accrued fees and advances due to General Partner and affiliates as of
December 31, 1998 and 1997 consist of the following:

1998 1997
---- ----
Reimbursement for expenses paid by an
affiliate of the General Partner. $ 4,833 $ 3,568

Asset management fee payable 101,667 61,667
--------------- ----------------

$ 106,500 $ 65,235
=============== ================

26

WNC HOUSING TAX CREDIT FUND IV, L.P., SERIES 1
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For The Years Ended December 31, 1998, 1997 and 1996

NOTE 4 - PAYABLES TO LIMITED PARTNERSHIPS

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

NOTE 5 - INCOME TAXES

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

NOTE 6 - COMMITMENTS AND CONTINGENCIES

In October 1998, the Partnership acquired a 99% limited partner interest in an
additional limited partnership which committed the Partnership to additional
contributions of approximately $276,000, of which $253,000 has been contributed
by the Partnership as of December 31, 1998.

27

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

(a)(1)

(i) On February 16, 1999 Corbin & Wertz, Irvine, California was dismissed
as the Partnership's principal independent accountant.

(ii) During the last two fiscal years of the Partnership, the reports of
Corbin & Wertz respecting the financial statements of the Partnership
did not contain an adverse opinion or a disclaimer of opinion, nor were
any such reports qualified or modified as to uncertainty, audit scope
or accounting principles.

(iii) The decision to change accountants was approved by the board of
directors of WNC & Associates, Inc., the general partner of the
Partnership.

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

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

(a)(2)

On December 16, 1998, BDO Seidman, LLP, Costa Mesa, California was engaged as
the Partnership's principal independent accountant. During the last two fiscal
years and subsequent interim period of the Partnership, the Partnership did not
consult BDO Seidman, LLP regarding (i) either, the application of accounting
principles to a specified transaction; or the type of audit opinion that might
be rendered on the Partnership's financial statements, or (ii) any matter that
was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of
Securities and Exchange Commission Regulation S-K) or was a reportable event (as
defined in Item 304(a)(1)(v) of Securities and Exchange Commission Regulation
S-K).

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

28

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

Wilfred N. Cooper, Jr., age 36, is Executive Vice President, a Director and a
member of the Acquisition Committee of WNC & Associates, Inc. He is President
of, and a registered principal with, WNC Capital Corporation, a member firm of
the NASD, and is a Director of WNC Management, Inc. He has been involved in
investment and acquisition activities with respect to real estate since he
joined the Sponsor in 1988. Prior to this, he served as Government Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Advisory Board for LIHC Monthly Report, a Director of NMHC and an Alternate
Director of NAHB. He graduated from The American University in 1985 with a
Bachelor of Arts degree.

David N. Shafer, age 46, is Senior Vice President, a Director, General Counsel,
and a member of the Acquisition Committee of WNC & Associates, Inc., and a
Director and Secretary of WNC Management, Inc. Mr. Shafer has been involved in
real estate investment and acquisition activities since 1984. Prior to joining
the Sponsor in 1990, he was practicing law with a specialty in real estate and
taxation. Mr. Shafer is a Director and President of the California Council of
Affordable Housing and a member of the State Bar of California. Mr. Shafer
graduated from the University of California at Santa Barbara in 1978 with a
Bachelor of Arts degree, from the New England School of Law in 1983 with a Juris
Doctor degree (cum laude) and from the University of San Diego in 1986 with a
Master of Law degree in Taxation.

Michael L. Dickenson, age 42, is Vice President 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 44, is Vice President - Asset Management and a member of the
Acquisition Committee of WNC & Associates, Inc. and a Director and Chief
Executive Officer of WNC Management, Inc. Mr. Riha has been involved in
acquisition and investment activities with respect to real estate since 1979.
Prior to joining the Sponsor in 1994, Mr. Riha was employed by Trust Realty
Advisor, a real estate acquisition and management company, last serving as Vice
President - Operations. Mr. Riha graduated from the California State University,
Fullerton in 1977 with a Bachelor of Arts degree (cum laude) in Business
Administration with a concentration in Accounting and is a Certified Public
Accountant and a member of the American Institute of Certified Public
Accountants.

Sy P. Garban, age 53, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President 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.

29

N. Paul Buckland, age 36, is Vice President - Acquisitions of WNC & Associates,
Inc. He has been involved in real estate acquisitions and investments since 1986
and has been employed with WNC & Associates, Inc. since 1994. Prior to that, he
served on the development team of the Bixby Ranch 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 44, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.

Kay L. Cooper, age 62, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. Cooper graduated from the University of Southern California in
1958 with a Bachelor of Science degree.

Item 11. Executive Compensation:

The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to TCP IV or
Associates during the current or future years for the following fees:

(a) Annual Asset Management Fee. An annual asset management fee 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 the change
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 the indebtedness related to
the Housing Complexes. Fees of $40,000 were incurred for the year ended
December 31, 1998. The Partnership paid the General Partner or its
affiliates $0 of those fees in 1998.

(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 Expenses. The Partnership reimbursed the General Partner or
its affiliates for operating expenses of approximately $1,000 during the
year ended December 31, 1998.

(d) Interest in Partnership. The General Partners receive 1% of the
Partnership's allocated Low Income Housing Credits, which approximated
$14,000 for the General Partners for the year ended December 31, 1998. The
General Partners are also entitled to receive 1% of cash distributions.
There were no distributions of cash to the General Partners during the year
ended December 31, 1998.

30

Item 12. Security Ownership of Certain Beneficial Owners and Management

(a) Security Ownership of Certain Beneficial Owners

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

(b) Security Ownership of Management

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

(c) Changes in Control

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

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

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, December 31, 1998 and 1997
Statements of Operations for the years ended December 31, 1998, 1997
and 1996
Statements of Partners' Equity (Deficit) for the years ended December
31, 1998, 1997 and 1996
Statements of Cash Flows for the years
ended December 31, 1998, 1997 and 1996
Notes to Financial Statements

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

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

31

(b) Reports on Form 8-K.

1. A Form 8-K dated February 3, 1999 was filed on February 10, 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 incor-
porated. The Partnership Agreement is included as Exhibit B to the
Prospectus, filed as Exhibit 28.1 to Form 10-K for fiscal year ended
December 31, 1995.

10.1 Second Amended and Restated Agreement of Limited Partnership of Beck-
wood Manor Seven Limited Partnership filed as exhibit 10.1 to Form
8-K dated December 8, 1993 is hereby incorporated herein by reference
as exhibit 10.1.

10.2 Amended and Restated Agreement of Limited Partnership of Alpine Manor
filed as exhibit 10.3 to Post-Effective Amendment No 1 dated February
16, 1994 is hereby incorporated herein by reference as exhibit 10.2.

10.3 Second Amended and Restated Agreement of Limited Partnership of Briscoe
Manor, Limited Partnership filed as exhibit 10.4 to Post-Effective
Amendment No 1 dated February 16, 1994 is hereby incorporated herein by
reference as exhibit 10.3.

10.4 Amended and Restated Agreement and Certificate of Limited Partnership
of Evergreen Four, Limited Partnership filed as exhibit 10.5 to Post-
Effective Amendment No 1 dated February 16, 1994 is hereby incorporated
herein by reference as exhibit 10.4.

10.5 Amended and Restated Agreement and Certificate of Limited Partnership
of Fawn Haven, Limited Partnership filed as exhibit 10.6 to Post-
Effective Amendment No 1 dated February 16, 1994 is hereby incorporated
herein by reference as exhibit 10.5.

10.6 Amended and Restated Agreement of Limited Partnership of Fort Stock-
ton, L. P. filed as exhibit 10.7 to Post-Effective Amendment No 1
dated February 16, 1994 is hereby incorporated herein by reference as
exhibit 10.6.

10.7 Amended and Restated Agreement and Certificate of Limited Partner
ship of Madison Manor Senior Citizens Complex, Ltd. filed as
exhibit 10.8 to Post-Effective Amendment No 1 dated February 16, 1994
is hereby incorporated herein by reference as exhibit 10.7.

10.8 Amended and Restated Agreement and Certificate of Limited Partnership
of Mt. Graham Housing, Ltd. filed as exhibit 10.9 to Post-Effective
Amendment No 1 dated February 16, 1994 is hereby incorporated herein by
reference as exhibit 10.8.

10.9 Amended and Restated Agreement and Certificate of Limited Partnership
of Northside Plaza Apartments, Ltd. filed as exhibit 10.10 to Post-
Effective Amendment No 1 dated February 16, 1994 is hereby incorporated
herein by reference as exhibit 10.9.

10.10 Amended and Restated Agreement of Limited Partnership of Pampa Manor,
L.P. filed as exhibit 10.11 to Post-Effective Amendment No 1 dated
February 16, 1994 is hereby incorporated herein by reference as exhibit
10.10.

10.11 Amended and Restated Agreement of Limited Partnership of Vernon
Manor, L.P. filed as exhibit 10.12 to Post-Effective Amendment No 1
dated February 16, 1994 is hereby incorporated herein by reference as
exhibit 10.11.

10.12 Amended and Restated Agreement of Limited Partnership of Waterford
Place, A Limited Partnership filed as exhibit 10.13 to Post-Effective
Amendment No 1 dated February 16, 1994 is hereby incorporated herein by
reference as exhibit 10.12.

32

10.13 Amended and Restated Agreement of Limited Partnership of Yantis
Housing, Ltd filed as exhibit 10.13 to Post-Effective Amendment No 1
dated February 16, 1994 is hereby incorporated herein by reference as
exhibit 10.12.

10.14 Third Amended and Restated Agreement of Limited Partnership and
Certificate of Limited Partnership of Indian Creek Limited Partnership
filed as exhibit 10.16 to Post-Effective Amendment No 2 dated March 11,
1994 is hereby incorporated herein by reference as exhibit 10.14.

10.15 Agreement of Limited Partnership of Laurel Creek Apartments filed as
exhibit 10.1 to Form 8-K dated May 25, 1994 is hereby incorporated
herein by reference as exhibit 10.15.

10.16 Second Amended and Restated Agreement of Limited Partnership of Sand-
piper Square, A Limited Partnership filed as exhibit 10.2 to Form 8-K
dated May 25, 1994 is hereby incorporated herein by reference as
exhibit 10.16.

10.17 Amended and Restated Agreement of Limited Partnership of Regency
Court Partners filed as exhibit 10.1 to Form 8-K dated June 30, 1994
is hereby incorporated herein by reference as exhibit 10.17.

10.18 Disposition and Development Agreement By and Between The Community
Development Commission of the County of Los Angeles and Regency Court
Partners (including forum of Ground Lease) filed as exhibit 10.2 to
Form 8-K dated June 30, 1994 is hereby incorporated herein by reference
as exhibit 10.18.

10.19 Amended and Restated Agreement of Limited Partnership of Bay City
Village Apartments, Limited Partnership filed as exhibit 10.19 to
Post-Effective Amendment No 4 dated July 14, 1994 is hereby incorporat-
ed herein by reference as exhibit 10.19.

10.20 Second Amended and Restated Agreement of Limited Partnership of Hidden
Valley Limited Partnership filed as exhibit 10.20 to Post-Effective
Amendment No 4 dated July 14, 1994 is hereby incorporated herein by
reference as exhibit 10.20.

10.21 Amended and Restated Agreement of Limited Partnership of HOI
Limited Partnership of Lenoir and Amendments thereto filed as
exhibit 10.21 to Post-Effective Amendment No 4 dated July 14, 1994 is
hereby incorporated herein by reference as exhibit 10.21.

(d) Financial statement schedule follows, as set forth in subsection
(a)(2) hereof.

33

Report of Independent Certified Public Accounts on
Financial Statement Schedule

To the Partners
WNC Housing Tax Credit Fund IV, L.P. Series 1

The audit referred to in our report dated April 5, 1999, relating to the 1998
financial statements of WNC Housing Tax Credit Fund IV, L.P. Series 1 (the
"Partnership"), which is contained in Item 8 of this Form 10-K, included the
audit of the accompanying financial statement schedule. The financial statement
schedule is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audit.

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

BDO SEIDMAN, LLP

Orange County, California
April 5, 1999

34

WNC Housing Tax Credit Fund IV, L.P., Series 1
Schedule III
Real Estate Owned by Local Limited Partnerships

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

Alpine Manor, L.P. Alpine,

Texas $ 195,000 $ 195,000 $ 920,000 $ 1,167,000 $ 134,000 $ 1,033,000

Baycity Village Apartments, Baytown,
Limited Partnership Texas 301,000 301,000 1,489,000 1,829,000 353,000 1,476,000

Beckwood Manor Seven Limited Marianna,
Partnership Arkansas 307,000 307,000 1,395,000 1,789,000 327,000 1,462,000

Briscoe Manor Limited Partnership Galena,
Maryland 308,000 308,000 1,521,000 1,813,000 305,000 1,508,000

Evergreen Four Limited Partnership Maynard,
Arkansas 195,000 195,000 873,000 1,128,000 199,000 929,000

Fawn Haven Limited Partnership Manchester,
Ohio 167,000 167,000 862,000 1,070,000 218,000 852,000

Fort Stockton Manor, L.P. Ft.
Stockton,
Texas 224,000 224,000 1,059,000 1,249,000 126,000 1,123,000

Hidden Valley Limited Partnership Gallup, New
Mexico 412,000 412,000 1,491,000 1,938,000 218,000 1,720,000

HOI Limited Partnership Of Lenoir Lenoir,
North
Carolina 198,000 198,000 572,000 1,167,000 184,000 983,000

Indian Creek Limited Partnership Bucyrus,
Ohio 306,000 306,000 1,542,000 1,775,000 285,000 1,490,000

Laurel Creek Apartments San Luis
Obispo,
California 1,030,000 1,030,000 681,000 2,166,000 322,000 1,844,000

35

WNC Housing Tax Credit Fund IV, L.P., Series 1
Schedule III
Real Estate Owned by Local Limited Partnerships

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

Madisonville Manor Senior Citizens Madisonville,
Complex, Ltd. Texas $ 174,000 $ 174,000 $ 905,000 $ 1,150,000 $ 72,000 $ 1,078,000

Mt. Graham Housing, Ltd. Safford,
Arizona 410,000 410,000 1,416,000 1,873,000 311,000 1,562,000

Northside Plaza Apartments, Ltd. Angleton,
Texas 282,000 282,000 1,369,000 1,724,000 135,000 1,589,000

Pampa Manor, L.P. Pampa,
Texas 180,000 180,000 849,000 1,029,000 110,000 919,000

Regency Court Partners Monrovia,
California 1,692,000 1,690,000 5,283,000 7,658,000 617,000 7,041,000

Sandpiper Square, a Limited Aulander,
Partnership North
Carolina 219,000 219,000 953,000 1,191,000 134,000 1,057,000

Seneca Falls East Apartments Seneca
Company II, L.P. Falls, New 276,000 253,000 896,000 1,213,000 21,000 1,192,000
York

Vernon Manor, L.P. Vernon,
Texas 161,000 161,000 786,000 904,000 96,000 808,000

Waterford Place, a Limited Calhoun
Partnership Falls, South
Carolina 272,000 272,000 1,189,000 1,518,000 277,000 1,241,000

Yantis Housing, Ltd. Yantis,
Texas 145,000 145,000 633,000 837,000 101,000 736,000
--------- --------- ---------- ---------- --------- ----------

$ 7,454,000 $ 7,429,000 $ 26,684,000 $ 36,188,000 $ 4,545,000 $ 31,643,000
========= ========= ========== ========== ========= ==========

36

WNC Housing Tax Credit Fund IV, L.P., Series 1
Schedule III
Real Estate Owned by Local Limited Partnerships

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

Alpine Manor, L.P. 104,000 (19,000) 1994 Completed 40

Baycity Village Apartments,
Limited Partnership 260,000 (48,000) 1994 Completed 30

Beckwood Manor Seven Limited
Partnership 142,000 (49,000) 1993 Completed 27.5

Briscoe Manor Limited
Partnership 156,000 (57,000) 1994 Completed 27.5

Evergreen Four Limited
Partnership 68,000 (39,000) 1994 Completed 27.5

Fawn Haven Limited
Partnership 78,000 (26,000) 1994 Completed 27.5

Fort Stockton Manor, L.P. 109,000 (21,000) 1994 Completed 40

Hidden Valley Limited
Partnership 149,000 (32,000) 1994 Completed 40

HOI Limited Partnership Of
Lenoir 119,000 (45,000) 1993 Completed 40

Indian Creek Limited
Partnership 136,000 (48,000) 1994 Completed 27.5

Laurel Creek Apartments 164,000 (22,000) 1994 Completed 27.5

Madisonville Manor Senior
Citizens Complex, Ltd. 105,000 (4,000) 1994 Completed 50

Mt. Graham Housing, Ltd. 147,000 (59,000) 1994 Completed 27.5

Northside Plaza Apartments,
Ltd. 142,000 (12,000) 1994 Completed 50

Pampa Manor, L.P. 104,000 (15,000) 1994 Completed 40

Regency Court Partners 646,000 (224,000) 1994 Completed 40

Sandpiper Square, a Limited
Partnership 92,000 (21,000) 1994 Completed 35

Seneca Falls East Apartments
Company II, L.P.
124,000 9,000 1998 Completed 40

37

WNC Housing Tax Credit Fund IV, L.P., Series 1
Schedule III
Real Estate Owned by Local Limited Partnerships

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

Vernon Manor, L.P. 84,000 (31,000) 1994 Completed 40

Waterford Place, a Limited
Partnership 120,000 (25,000) 1994 Completed 40

Yantis Housing, Ltd. 73,000 (11,000) 1994 Completed 40
--------- ---------
$ 3,122,000 $ (799,000)
========= =========

38

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 1 (Registrant))

By: WNC Tax Credit Partners IV, L.P., General Partner

By: WNC & Associates, Inc., General Partner

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

Date: July 27, 1999

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

Date: July 27, 1999

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

Date: July 27, 1999

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

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

Date: July 27, 1999

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

Date: July 27, 1999

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

Date: July 27, 1999

39