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, 2002

OR

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

For the transition period from __________ to __________

Commission file number: 0-28370

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__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. <060>o<048><057><057><062>

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 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"). The chairman and president own substantially
all 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
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, 2002, 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

3

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 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, 2002 As of December 31, 2001
------------------------- -----------------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
General Partner In Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Apartment Developers
East Brewton, Brewton, Inc. and Thomas H.
Ltd. Alabama Cooksey $ 1,192,000 $ 1,192,000 40 97% $ 1,863,000 $ 1,139,000

Autumn Trace Silsbee, Olsen Securities
Associates, Ltd. Texas Corp. 412,000 412,000 58 91% 714,000 1,243,000

Broken Bow Retro
Apartments I, Limited Broken Bow, Development,
Partnership Nebraska Inc. 608,000 608,000 16 100% 1,127,000 586,000

Candleridge
Apartments Waukee, Eric A.
of Waukee L.P. II Iowa Sheldahl 125,000 125,000 23 100% 230,000 676,000

Boyd Management, Inc.
Chadwick Gordon L. Blackwell
Limited Edan, North and Regency
Partnership Carolina Investment Associates 378,000 378,000 48 100% 735,000 1,540,000

Comanche
Retirement Comanche, Max L.
Village, Ltd. Texas Rightmer 136,000 136,000 22 100% 265,000 589,000

Crossings II Limited
Dividend Housing
Association Limited Portage, Raymond T.
Partnership Michigan Cato, Jr. 432,000 432,000 114 96% 739,000 5,812,000

Philip Wallis, James
EW, a Wisconsin Poehlman, Cynthia
Limited Evansville, Solfest Wallis, and
Partnership Wisconsin Anita Poehlman 164,000 164,000 16 88% 306,000 613,000

5

------------------------- -----------------------------------------------
As of March 31, 2002 As of December 31, 2001
------------------------- -----------------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
General Partner In Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------

Conrad L. Beggs,
Garland Street Audrey D. Beggs,
Limited Malvarn, Russell J. Altizer,
Partnership Arkansas and Marjorie L. Beggs 164,000 164,000 18 100% 319,000 690,000

Hereford Seniors Hereford, Winston
Community, Ltd. Texas Sullivan 167,000 167,000 28 93% 330,000 796,000

Hickory Lane Newton, Olsen Securities
Associates, Ltd Texas Corp. 174,000 174,000 24 92% 320,000 593,000

Honeysuckle Court Vidor, Olsen Securities
Associates, Ltd. Texas Corp 339,000 339,000 48 98% 622,000 1,159,000

Klimpel Manor, Fullerton, Klimpel Manor
Ltd California Apartments 1,774,000 1,774,000 59 98% 3,360,000 1,297,000

Lamesa Seniors Lamesa, Winston
Community, Ltd. Texas Sullivan 143,000 143,000 24 83% 284,000 669,000

Laredo Heights Navasota, Donald W.
Apartments Ltd. Texas Sowell 225,000 225,000 48 96% 413,000 981,000

Mountainview North John C.
Apartments Wilkesboro, Loving and
Limited North Gordon D.
Partnership Carolina Brown, Jr. 195,000 195,000 24 100% 387,000 989,000

Palestine Seniors Palestine, Winston
Community, Ltd. Texas Sullivan 225,000 225,000 42 93% 446,000 1,119,000

Pecan Grove Forrest Conrad Beggs, Audrey
Limited City, Beggs and Russell
Partnership Arkansas Altizer 240,000 240,000 32 94% 486,000 1,104,000

6

------------------------- -----------------------------------------------
As of March 31, 2002 As of December 31, 2001
------------------------- -----------------------------------------------
Partnership's Estimated Encumbrances
Total Investment Amount of Low Income of Local
General Partner In Local Limited Investment Number Housing Limited
Partnership Name Location Name Partnerships Paid to Date Of Units Occupancy Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------

Philip R. Hammond,
Pioneer Street Bakersfield, Jr. and Walter A.
Associates Associates Dwelle 2,222,000 2,222,000 112 88% 4,116,000 1,836,000

Sidney Retro Development,
Apartments I, Inc. And Most
Limited Sidney, Worshipful Prince
Partnership Nebraska Hall Grand Lodge 530,000 530,000 18 89% 972,000 431,000

Orange Philip R. Hammond,
Southcove Cove, Jr. and Diane M.
Associates California Hammond 2,000,000 2,000,000 54 98% 3,585,000 1,521,000

Walnut Turn Buna, Olsen Securities
Associates, Ltd. Texas Corp. 188,000 188,000 24 96% 344,000 686,000
------------ ------------ ----- ---- ------------- ------------
$ 12,033,000 $ 12,033,000 892 95% $ 21,963,000 $ 26,069,000
============ ============ ==== ==== ============= ===========

7

------------------------------------------------------------------------------------
For the year ended December 31, 2001
------------------------------------------------------------------------------------
Low Income Housing
Credits Allocated to
Partnership Name Rental Income Net Loss Partnership
- --------------------------------------------------------------------------------------------------------------------

Apartment Housing of East
Brewton, Ltd. $ 116,000 $ (74,000) 98.99%

Autumn Trace Associates, Ltd.
232,000 (33,000) 95.00%

Broken Bow Apartments I,
Limited Partnership 49,000 (37,000) 99.00%

Candleridge Apartments of
Waukee L.P. II 125,000 (9,000) 99.00%

Chadwick Limited Partnership 189,000 (36,000) 99.00%

Comanche Retirement Village,
Ltd. 74,000 (13,000) 99.00%

Crossings II Limited Dividend
Housing Association Limited
Partnership 738,000 (88,000) 98.99%

EW, a Wisconsin Limited
Partnership 76,000 (33,000) 99.00%

Garland Street Limited
Partnership 76,000 (31,000) 99.00%

Hereford Seniors Community,
Ltd. 89,000 (11,000) 99.00%

Hickory Lane Associates, Ltd 90,000 (26,000) 99.00%

Honeysuckle Court Associates,
Ltd. 202,000 (42,000) 95.00%

Klimpel Manor, Ltd 398,000 (52,000) 96.00%

Lamesa Seniors Community, Ltd.
110,000 (43,000) 99.00%

Laredo Heights Apartments Ltd.
181,000 (20,000) 99.00%

Mountainview Apartments
Limited Partnership 99,000 (10,000) 99.00%

Palestine Seniors Community,
Ltd. 134,000 (16,000) 99.00%

Pecan Grove Limited Partnership 124,000 (41,000) 99.00%

8

------------------------------------------------------------------------------------
For the year ended December 31, 2001
------------------------------------------------------------------------------------
Low Income Housing
Credits Allocated to
Partnership Name Rental Income Net Loss Partnership
- --------------------------------------------------------------------------------------------------------------------

Pioneer Street Associates 487,000 (87,000) 99.00%

Sidney Apartments I, Limited 71,000 (36,000)
Partnership 99.00%

Southcove Associates 216,000 (120,000) 99.00%

Walnut Turn Associates, Ltd. 91,000 (27,000) 99.00%
----------- -----------
$3,967,000 $ (885,000)
=========== ===========

9

Item 3. Legal Proceedings

During 2000, 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, Limited
Partnership and Sidney Apartments I, Limited Partnership. 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")
were defendants in a separate lawsuit. The lawsuit was 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. In July 2001, this lawsuit was settled for
an aggregate amount of $35,000 of which the Partnership's share was
approximately $11,700.

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

NONE.

PART II.

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

Item 5a.

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

(b) At March 31, 2002, there were 849 Limited Partners.

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

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

Item 5b.

NOT APPLICABLE

10

Item 6. Selected Financial Data

Selected balance sheet information for the Partnership is as follows:

March 31 December 31
-------------------------------------------------- ------------------------
2002 2001 2000 1999 1998 1997
----------- ----------- ----------- ----------- ----------- -----------

ASSETS
Cash and cash
equivalents $ 32,342 $ 84,147 $ 180,133 $ 552,348 $ 738,364 $ 1,480,862
Investments in limited
partnerships, net 6,677,963 7,432,933 8,311,454 10,092,782 10,274,595 9,738,583
Loans receivable - - - - - 259,496
Other assets 3,998 998 998 998 2,534 20,245
----------- ----------- ----------- ----------- ----------- -----------
$ 6,714,303 $ 7,518,078 $ 8,492,585 $ 10,646,128 $ 11,015,493 $ 11,499,186
=========== =========== =========== =========== =========== ===========
LIABILITIES
Payables to limited
partnerships $ - $ - $ - $ 421,025 $ 605,517 $ 411,543
Accrued expenses 4,000 48,569 86,965 - - -
Accrued fees and
expenses
due to general
partner
and affiliates 316,573 107,278 72,598 29,722 28,066 1,137

PARTNERS' EQUITY 6,393,730 7,362,231 8,333,022 10,195,381 10,381,910 11,086,506
----------- ----------- ----------- ----------- ----------- -----------
$ 6,714,303 $ 7,518,078 $ 8,492,585 $ 10,646,128 $ 11,015,493 $ 11,499,186
=========== =========== =========== =========== =========== ===========

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

For the Years Ended For the Three Months For the Years Ended
March 31 Ended March 31 December 31
------------------------------------- ----------------------- ------------------------
2002 2001 2000 1999 1998 1998 1997
----------- ----------- ----------- ---------- ---------- ---------- ----------
(Unaudited)

Loss from
operations (Note 1) $ (251,713) $ (139,153) $ (870,197) $ (21,846) $ (1,492) $ (50,484)$ (31,969)
Equity in losses of
limited
partnerships (716,788) (831,638) (992,162) (164,683) (191,552) (658,728) (737,115)
----------- ----------- ----------- ---------- ---------- ---------- ----------
Net loss $ (968,501) $ (970,791) $(1,862,359) $ (186,529) $ (193,044) $ (709,212)$ (769,084)
=========== =========== =========== ========== ========== ========== ==========
Net loss allocated to:
General partner $ (9,685) $ (9,708) $ (18,624) $ (1,865) $ (1,930) $ (7,092)$ (7,691)
=========== =========== =========== ========== ========== ========== ==========
Limited partners $ (958,816) $ (961,083) $(1,843,735) $ (184,664) $ (191,114) $ (702,120)$ (761,393)
=========== =========== =========== ========== ========== ========== ==========
Net loss per limited
partner unit $ (61.46) $ (61.61) $ (118.19) $ (11.84) $ (12.25) $ (45.01)$ (48.81)
=========== =========== =========== =========== ========== ========== ==========
Outstanding weighted
limited partner
units 15,600 15,600 15,600 15,600 15,600 15,600 15,600
=========== =========== =========== ========== ========== ========== ==========

Note 1 - Loss from operations in 2000 includes a charge for impairment losses on
investments in limited partnerships of $766,559. (See Note 2 to the audited
financial statements.)

11

For the Years Ended For the Three Months For the Years Ended
March 31 Ended March 31 December 31
------------------------------------- ----------------------- ------------------------
2002 2001 2000 1999 1998 1998 1997
----------- ----------- ----------- ---------- ---------- ---------- -----------
(Unaudited)

Net cash provided by
(used in):
Operating activities $ (52,055)$ (101,935)$ (19,827)$ (8,424)$ 12,245 $ 26,255 $ 52,765
Investing activities 250 5,949 (352,388) (177,592) (109,910) (768,753) (935,090)
Financing activities - - - - - - (8,202)
----------- ----------- ----------- ---------- ---------- ---------- -----------
Net change in cash and
cash equivalents (51,805) (95,986) (372,215) (186,016) (97,665) (742,498) (890,527)

Cash and cash
equivalents,
beginning of period 84,147 180,133 552,348 738,364 1,480,862 1,480,862 2,371,389
----------- ----------- ----------- ---------- ---------- ---------- -----------
Cash and cash
equivalents,
end of period $ 32,342 $ 84,147 $ 180,133 $ 552,348 $ 1,383,197 $ 738,364 $ 1,480,862
=========== =========== =========== ========== ========== ========== ===========

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

2001 2000 1999 1998 1997
-------------- --------------- -------------- ------------- -------------
Federal $ 137 $ 141 $ 135 $ 124 $ 113
State - - - - -
-------------- --------------- -------------- ------------- -------------
Total $ 137 $ 141 $ 135 $ 124 $ 113
============== =============== ============== ============= =============

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

Forward Looking Statements

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

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

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

12

Uncertainty and Commitments 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").

During the year ended March 31, 2000, Broken Bow and Sidney continued to
experience operational difficulties and negative cash flows from operations, and
ceased paying their lender. Foreclosure procedures were commenced by these two
Local Limited Partnerships' lender. Management performed an evaluation of the
Partnership's remaining investment balances in Broken Bow and Sidney, including
any other anticipated costs and determined that an impairment adjustment was
necessary. An impairment loss of $766,559 was recognized for the year ended
March 31, 2000. This impairment loss included $558,688 in remaining net book
value of the Partnership's investments in Broken Bow and Sidney, $120,906 and
$30,753 of 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 foregoing, the Partnership, Broken Bow, Sidney, and a WNC
subsidiary executed a work-out agreement with the lender (the "Agreement"),
which was effective December 14, 2001. Broken Bow was required to pay to the
lender $165,000 as a partial settlement of the indebtedness due and owing by
Broken Bow due to the fact that their loan was a construction loan. The
Partnership advanced the aforementioned monies to Broken Bow and fully reserved
the amount as of March 31, 2002. The balance of the indebtedness due and owing
to the lender by Broken Bow was satisfied by the execution of two promissory
notes. The first note totals $85,000, bears interest at 7% per annum, and
requires principal and interest payments totaling $600 per month through April
2014, at which date the unpaid principal balance is due. The second note totals
$500,000, bears interest at 1% per annum, and has payments due monthly out of
available cash flow, as defined, with the unpaid principal balance due April
2014. The balance of the indebtedness due and owing to the lender by Sidney was
satisfied by the execution of two promissory notes. The first note totals
$130,000, bears interest at 7% per annum, and requires principal and interest
payments totaling $900 per month through April 2012, at which date the unpaid
principal is due. The second note totals $300,000, bears interest at 1% per
annum, and has payments due monthly out of available cash flow, as defined, with
the unpaid principal balance due April 2014. The Partnership and a WNC
subsidiary have executed a guarantee for the payment of both notes of Broken Bow
and Sidney. In addition, several other commitments were made. Broken Bow and
Sidney executed a grant deed to the lender in the event that either entity
defaults under the terms and provisions of the notes. The deeds are held in
escrow, and if Broken Bow or Sidney defaults on either note, the lender may, at
its option, record the respective deed. In addition, the Partnership has
assigned the lender as additional collateral all of its residual value
interests, as defined, in all of the Local Limited Partnerships. The Partnership
and the Local Limited Partnerships are prohibited from selling, assigning,
transferring or further encumbering the Housing Complexes retained by each Local
Limited Partnership.

As a result of the operating difficulties mentioned above, there is uncertainty
as to additional costs, if any, that the Partnership may incur in connection
with its investment in Broken Bow and Sidney and as to whether the Partnership
will ultimately retain its interest in these Local Limited Partnerships. In the
event the Partnership does not successfully retain its interest in Broken Bow
and Sidney, the Partnership would be exposed to the cessation and recapture of
the related tax credits. 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, 2002 consisted primarily of $32,000 in
cash, $4,000 in other assets and aggregate investments in the twenty-two Local
Limited Partnerships of $6,678,000. Liabilities at March 31, 2002 primarily
consisted of $4,000 of accrued expenses and $317,000 due to General Partner or
affiliates for advances.

13

Results of Operations

Year Ended March 31, 2002 Compared to Year Ended March 31, 2001 The Partnerships
net loss for the year ended March 31, 2002 was $(969,000), reflecting a decrease
of $(2,000) from the net loss experienced for the year ended March 31, 2000 of
$(971,000). The decline in net loss is due to a reduction in the equity in
losses of limited partnerships which decreased by $115,000, offset by an
increase in operating expenses of $111,000 and a decrease in income of $2,000.

Year Ended March 31, 2001 Compared to Year Ended March 31, 2000 The Partnerships
net loss for the year ended March 31, 2001 was $(971,000), reflecting a decrease
of $(891,000) from the net loss experienced for the year ended March 31, 2000 of
$(1,862,000). The decline in net loss is due to the impairment loss recorded
during 2000 in connection with two of the limited partnership investments
totaling $767,000, a reduction in the equity in losses of limited partnerships
which decreased by $160,000 due largely to the impairment loss recorded in 2000,
offset by a reduction in income of $8,000 and an increase in other operating
expenses fees of $27,000.

Cash Flows

Year Ended March 31, 2002 Compared to Year Ended March 31, 2001 Net decrease in
cash for the year ended March 31, 2002 was $(52,000) compared to a net decrease
in cash for the year ended March 31, 2001 of $(96,000). The change of $44,000
was due primarily to a decrease in cash used in operating activities of $50,000
due primarily to the increase in accrued fees and expenses due to the General
Partner and affiliates, offset by a net decrease of $6,000 in distributions from
limited partnerships.

Year Ended March 31, 2001 Compared to Year Ended March 31, 2000 Net decrease in
cash for the year ended March 31, 2001 was $(96,000) compared to a net decrease
in cash for the year ended March 31, 2000 of $(372,000). The change of $276,000
was due primarily to a decrease in cash paid for investments in limited
partnerships of $251,000, a decrease of $121,000 in cash advances to limited
partnerships, offset by an increase of $47,000 of fees paid to General Partner,
a net decrease of $28,000 in distributions from limited partnerships and a
decrease in income of $8,000.

During the year ended March 31, 2002 and 2001 accrued payables, which consist of
an advance from WNC & Associates, Inc. to fund an advance to Broken Bow of
$165,000 and related party management fees due to the General Partner increased
by $44,000, a net increase of $209,000. The General Partner does not anticipate
that these accrued management 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 does not expect its future cash flows, together with its net
available assets at March 31, 2002, to be sufficient to meet all currently
foreseeable future cash requirements. Accordingly, WNC and Associates, Inc. has
agreed to provide advances sufficient to fund the operations and working capital
requirements of the Partnership through April 1, 2003.

Impact of New Accounting Pronouncement

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

NOT APPLICABLE

Item 8. Financial Statements and Supplementary Data

14

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, 2002 and 2001, and the related statements of operations, partners'
equity (deficit) and cash flows for the years ended March 31, 2002, 2001 and
2000. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. A significant portion of the financial
statements of the limited partnerships in which the Partnership is a limited
partner 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 83% and 81% of the total assets of the Partnership at March 31, 2002
and 2001, 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.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the 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 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 2 (a
California Limited Partnership) as of March 31, 2002 and 2001, and the results
of its operations and its cash flows for the years ended March 31, 2002, 2001
and 2000, in conformity with accounting principles generally accepted in the
United States of America.

The Partnership currently has insufficient working capital to fund its
operations. As discussed in Note 7 to the accompanying financial statements, WNC
& Associates, Inc., has agreed to provide advances sufficient enough to fund the
operations and working capital requirements of the Partnership through April 1,
2003.

/s/BDO SEIDMAN, LLP

Orange County, California
June 13, 2002

15

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

BALANCE SHEETS

March 31
-------------------------------

2002 2001
-------------- --------------

ASSETS

Cash and cash equivalents $ 32,342 $ 84,147
Investments in limited partnerships,
net (Notes 2, 3, 4 and 7) 6,677,963 7,432,933
Other assets 3,998 998
-------------- --------------

$ 6,714,303 $ 7,518,078
============== ==============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
Accrued expenses (Note 2) $ 4,000 $ 48,569
Accrued fees and expenses due to General
Partner and affiliates (Note 4) 316,573 107,278
-------------- --------------

Total liabilities 320,573 155,847
-------------- --------------

Commitments and contingencies (Notes 2, 3 and 7)

Partners' equity (deficit):
General partner (88,375) (78,690)
Limited partners (20,000 units authorized;
15,600 units issued and outstanding) 6,482,105 7,440,921
-------------- --------------

Total partners' equity 6,393,730 7,362,231
-------------- --------------

$ 6,714,303 $ 7,518,078
============== ==============

See report of independent certified public accountants and accompanying notes to
financial statements.
16

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

STATEMENTS OF OPERATIONS

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

Interest income $ 2,083 $ 7,274 $ 14,374
Reporting fees 5,800 2,950 4,000
--------------- ------------- -------------
Total income 7,883 10,224 18,374
--------------- ------------- -------------
Operating expenses:
Amortization (Notes 3 and 4) 37,932 40,934 40,935
Asset management fees (Note 4) 44,000 44,000 42,900
Provision for uncollectible advances to limited
partnership (Note 2) 165,000 - -
Other 12,664 64,443 38,177
Impairment on investments in limited
partnerships (Notes 2 and 3) - - 766,559
--------------- ------------- -------------
Total operating expenses 259,596 149,377 888,571
--------------- ------------- -------------
Loss from operations (251,713) (139,153) (870,197)

Equity in losses of limited
partnerships (Note 3) (716,788) (831,638) (992,162)
--------------- ------------- -------------
Net loss $ (968,501) $ (970,791) $ (1,862,359)
=============== ============= =============
Net loss allocated to:
General partner $ (9,685) $ (9,708) $ (18,624)
=============== ============= =============
Limited partners $ (958,816) $ (961,083) $ (1,843,735)
=============== ============= =============
Net loss per limited partner unit $ (61.46) $ (61.61) $ (118.19)
=============== ============= =============
Outstanding weighted limited partner units 15,600 15,600 15,600
=============== ============= =============

See report of independent certified public accountants and accompanying notes to
financial statements.
17

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

STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

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

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

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

Net loss (9,708) (961,083) (970,791)
--------------- --------------- --------------

Partners' equity (deficit) at March 31, 2001 (78,690) 7,440,921 7,362,231

Net loss (9,685) (958,816) (968,501)
--------------- --------------- --------------
Partners' equity (deficit) at March 31, 2002 $ (88,375) $ 6,482,105 $ 6,393,730
=============== =============== ==============

See report of independent certified public accountants and accompanying notes to
financial statements.

18

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

STATEMENTS OF CASH FLOWS

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

Cash flows from operating activities:
Net loss $ (968,501) $ (970,791) $ (1,862,359)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization 37,932 40,934 40,935
Impairment loss on investments in limited
partnerships - - 766,559
Equity in losses of limited
partnerships 716,788 831,638 992,162
Change in other assets (3,000) - -
Change in accrued expenses (44,569) (38,396) -
Change in accrued fees and expenses
due to General Partner and affiliates 209,295 34,680 42,876
-------------- ------------- -------------
Net cash used in operating activities (52,055) (101,935) (19,827)
-------------- ------------- -------------
Cash flows from investing
activities:
Investments in limited
partnerships, net - - (251,149)
Distributions from limited
partnerships 250 5,949 19,667
Cash advances to limited partnerships - - (120,906)
-------------- ------------- -------------
Net cash provided by (used in) investing
activities 250 5,949 (352,388)
-------------- ------------- -------------
Net decrease in cash and cash
equivalents (51,805) (95,986) (372,215)

Cash and cash equivalents,
beginning of period 84,147 180,133 552,348
-------------- ------------- -------------
Cash and cash equivalents, end of
period $ 32,342 $ 84,147 $ 180,133
============== ============= =============
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
Taxes paid $ 800 $ 800 $ 800
============== ============= =============

See report of independent certified public accountants and accompanying notes to
financial statements.
19

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

NOTES TO FINANCIAL STATEMENTS

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------

Organization
- ------------

WNC 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. The chairman and president own
substantially all of the outstanding stock of WNC.

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

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.

20

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

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

Risks and Uncertainties
- -----------------------

The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local 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 Notes 3 and 4).

Equity in losses from Local Limited Partnerships for the years ended March 31,
2002, 2001 and 2000 have been recorded by the Partnership based on nine months
of reported results provided by the Local Limited Partnerships and on three
months of results estimated by management of the Partnership. Equity in losses
from the limited partnerships allocated to the Partnership will not be
recognized to the extent that the investment balance would be adjusted below
zero. As soon as the investment balance reaches zero, amortization of the
related costs of acquiring the investment are accelerated to the extent of
losses available (see Note 3).

21

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

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

Offering Expenses
- -----------------

Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred with selling limited
partnership interests in the Partnership. The General Partner is obligated to
pay all offering and organization costs in excess of 15% (including sales
commissions) of the total offering proceeds. Offering expenses are reflected as
a reduction of partners' capital and amounted to $1,971,172 at the end of all
periods presented.

Use of Estimates
- ----------------

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

Cash and Cash Equivalents
- -------------------------

The Partnership considers highly liquid investments with maturities of three
months or less when purchased to be cash equivalents. As of March 31, 2002 and
2001, the Partnership had no cash equivalents.

Net Loss Per Limited Partner Unit
- ---------------------------------

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

Reporting Comprehensive Income
- ------------------------------

The Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income established standards for the reporting and display of
comprehensive income (loss) and its components in a full set of general-purpose
financial statements. The Partnership had no items of other comprehensive income
during the years ended March 31, 2002, 2001 and 2000, as defined by SFAS No.
130.

New Accounting Pronouncement
- ----------------------------

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses accounting and financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 is effective for fiscal years beginning
after December 15, 2001, and generally, is to be applied prospectively. The
Partnership has not yet completed its evaluation of the impact of SFAS 144 on
its financial position or results of operations.

22

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 2 - UNCERTAINTY AND COMMITMENTS WITH RESPECT TO INVESTMENTS IN BROKEN BOW
- --------------------------------------------------------------------------------
AND SIDNEY, continued
---------------------

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").

During the year ended March 31, 2000, Broken Bow and Sidney continued to
experience operational difficulties and negative cash flows from operations, and
ceased paying their lender. Foreclosure procedures were commenced by these two
Local Limited Partnerships' lender. Management performed an evaluation of the
Partnership's remaining investment balances in Broken Bow and Sidney, including
any other anticipated costs and determined that an impairment adjustment was
necessary. An impairment loss of $766,559 was recognized for the year ended
March 31, 2000. This impairment loss included $558,688 in remaining net book
value of the Partnership's investments in Broken Bow and Sidney, $120,906 and
$30,753 of 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 foregoing, the Partnership, Broken Bow, Sidney, and a WNC
subsidiary executed a work-out agreement with the lender (the "Agreement"),
which was effective December 14, 2001. Broken Bow was required to pay to the
lender $165,000 as a partial settlement of the indebtedness due and owing by
Broken Bow due to the fact that their loan was a construction loan. The
Partnership advanced the aforementioned monies to Broken Bow and fully reserved
the amount as of March 31, 2002. The balance of the indebtedness due and owing
to the lender by Broken Bow was satisfied by the execution of two promissory
notes. The first note totals $85,000, bears interest at 7% per annum, and
requires principal and interest payments totaling $600 per month through April
2014, at which date the unpaid principal balance is due. The second note totals
$500,000, bears interest at 1% per annum, and has payments due monthly out of
available cash flow, as defined, with the unpaid principal balance due April
2014. The balance of the indebtedness due and owing to the lender by Sidney was
satisfied by the execution of two promissory notes. The first note totals
$130,000, bears interest at 7% per annum, and requires principal and interest
payments totaling $900 per month through April 2012, at which date the unpaid
principal is due. The second note totals $300,000, bears interest at 1% per
annum, and has payments due monthly out of available cash flow, as defined, with
the unpaid principal balance due April 2014. The Partnership and a WNC
subsidiary have executed a guarantee for the payment of both notes of Broken Bow
and Sidney. In addition, several other commitments were made. Broken Bow and
Sidney executed a grant deed to the lender in the event that either entity
defaults under the terms and provisions of the notes. The deeds are held in
escrow, and if Broken Bow or Sidney defaults on either note, the lender may, at
its option, record the respective deed. In addition, the Partnership has
assigned the lender as additional collateral all of its residual value
interests, as defined, in all of the Local Limited Partnerships. The Partnership
and the Local Limited Partnerships are prohibited from selling, assigning,
transferring or further encumbering the Housing Complexes retained by each Local
Limited Partnership.

As a result of the operating difficulties mentioned above, there is uncertainty
as to additional costs, if any, that the Partnership may incur in connection
with its investment in Broken Bow and Sidney and as to whether the Partnership
will ultimately retain its interest in these Local Limited Partnerships. In the
event the Partnership does not successfully retain its interest in Broken Bow
and Sidney, the Partnership would be exposed to the cessation and recapture of
the related tax credits. The Partnership's financial statements do not include
any adjustments that might result from the outcome of these uncertainties.

23

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------

As of March 31, 2002, 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. 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.

The Partnership's investments in Local Limited Partnerships as shown in the
balance sheets at March 31, 2002 and 2001 are approximately $502,000 and
$454,000, respectively, greater than the Partnership's equity as shown in the
Local Limited Partnerships' combined financial statements presented below. This
difference is primarily due to unrecorded losses, as discussed below,
acquisition, selection and other costs related to the acquisition of the
investments which have been capitalized in the Partnership's investment account
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, and the impairment of two Local Limited Partnerships (see Note 2).

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, 2002, the investment accounts in certain Local Limited Partnerships
had reached a zero balance. Consequently a portion of the Partnership's estimate
of its share of losses for the year ended March 31, 2002, 2001 and 2000
amounting to approximately $140,000, $36,000 and $9,000 have not been
recognized. As of March 31, 2002, the aggregate share of net losses not
recognized by the Partnership amounted to $209,000.

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

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

Investments per balance sheet, beginning of year $ 7,432,933 $ 8,311,454 $ 10,092,782
Tax credit adjustment - - (62,593)
Impairment loss on investments in limited partnerships
(Note 2) - - (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
Distributions received (250) (5,949) (19,667)
Equity in losses of limited partnerships (716,788) (831,638) (992,162)
Amortization of capitalized acquisition fees and costs (37,932) (40,934) (40,935)
----------- ----------- -------------
Investments per balance sheet, end of period $ 6,677,963 $ 7,432,933 $ 8,311,454
=========== =========== =============

24

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

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 were previously excluded from
the 2000 and 1999 presentation but have now been included in all periods
presented. See Note 2 for further discussion):

COMBINED CONDENSED BALANCE SHEETS

2001 2000
--------------- ---------------
(restated)

ASSETS

Land $ 1,634,000 $ 1,634,000
Buildings, net of accumulated amortization of $8,489,000 and
$7,023,000 for 2001 and 2000, respectively 31,695,000 33,076,000
Due from affiliates 54,000 54,000
Other assets 2,532,000 2,245,000
--------------- ---------------

$ 35,915,000 $ 37,009,000
=============== ===============

LIABILITIES

Mortgage and construction loans payable $ 26,069,000 $ 26,555,000
Other liabilities (including due to related parties of $1,993,000 and
$1,678,000 as of December 31, 2001 and 2000, respectively) 2,742,000 2,457,000
--------------- ---------------

28,811,000 29,012,000
--------------- ---------------

PARTNERS' CAPITAL

WNC Housing Tax Credit Fund IV, L.P., Series 2 6,176,000 6,979,000
Other partners 928,000 1,018,000
--------------- ---------------

7,104,000 7,997,000
--------------- ---------------

$ 35,915,000 $ 37,009,000
=============== ===============

25

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------

COMBINED CONDENSED STATEMENTS OF OPERATIONS

2001 2000 1999
--------------- --------------- ---------------
(restated) (restated)

Revenues $ 4,121,000 $ 3,930,000 $ 3,892,000
--------------- --------------- ---------------
Expenses:
Operating expenses 2,559,000 2,368,000 2,255,000
Interest expense 1,100,000 1,191,000 1,268,000
Depreciation and amortization 1,347,000 1,367,000 1,316,000
--------------- --------------- ---------------
Total expenses 5,006,000 4,926,000 4,839,000
--------------- --------------- ---------------
Net loss $ (885,000) $ (996,000) $ (947,000)
=============== =============== ===============
Net loss allocable to the Partnership $ (874,000) $ (985,000) $ (935,000)
=============== =============== ===============
Net loss recorded by the Partnership $ (717,000) $ (832,000) $ (992,000)
=============== =============== ===============

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
(furthermore see Note 7).

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 $302,638 and $269,703 as of
March 31, 2002 and 2001, respectively. Of the accumulated amortization
recorded on the balance sheet at March 31, 2001, $67,480 of the related
expense was reflected as equity in losses of limited partnerships on the
statement of operations during the fourth quarter of the year ended March
31, 2001 to reduce the respective net acquisition fee component of
investments in local limited partnerships to zero for those Local Limited
Partnerships which would otherwise be below a zero balance.

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. The Partnership incurred acquisition costs
of $169,103, at the end of all periods presented, which have been included in
investments in limited partnerships. Accumulated amortization was $110,059 and
$46,011, as of March 31, 2002 and 2001, respectively. Of the accumulated
amortization recorded on the balance sheet at March 31, 2001, $15,258 of the
related expense was reflected as equity in losses of limited partnerships on the
statement of operations during the fourth quarter of the year ended March 31,
2001 to reduce the respective net acquisition cost component of investments in
local limited partnerships to zero for those Local Limited Partnerships which
would otherwise be below a zero balance. During the year ended March 31, 2002,
an additional $59,051 was recognized under the same methodology.

26

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

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 $44,000, $44,000 and $42,900 were
incurred during the years ended March 31, 2002, 2001 and 2000,
respectively, of which $0, $3,750 and $3,750 were paid during the
years ended March 31, 2002, 2001 and 2000, respectively.

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

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

March 31
-------------------------------
2002 2001
------------ ---------------

Reimbursement for expenses paid by the General
Partner or an affiliate $ 166,414 $ 1,119

Asset management fee payable 150,159 106,159
------------ ---------------

Total $ 316,573 $ 107,278
============ ===============

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.

27

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 5 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- ----------------------------------------------------

The following is a summary of the quarterly operations for the years ended March
31, 2002 and 2001.

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

2002
----

Income $ 800 $ 700 $ 500 $ 6,000

Operating expenses (26,000) (28,000) (190,000) (16,000)

Equity in losses of limited partnerships (168,000) (200,000) (138,000) (211,000)

Net loss (194,000) (227,000) (328,000) (218,000)

Loss available to limited partners (192,000) (225,000) (325,000) (217,000)

Loss per limited partner unit (12) (14) (21) (14)

2001
----

Income $ 2,000 $ 2,000 $ 2,000 $ 4,000

Operating expenses (42,000) (56,000) (26,000) (25,000)

Equity in losses of limited partnerships (187,000) (186,000) (187,000) (272,000)

Net loss (227,000) (240,000) (211,000) (293,000)

Loss available to limited partner (224,000) (238,000) (208,000) (291,000)

Loss per limited partner unit (14) (15) (13) (19)

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.

28

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

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

NOTE 7 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------

During 2000, 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, Limited
Partnership, and Sidney Apartments I, Limited Partnership. 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, 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")
were defendants in a separate lawsuit. The lawsuit was 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. In July 2001, this lawsuit was settled for
an aggregate amount of $35,000. The Partnership's allocated share of $11,700 had
been accrued in full at March 31, 2001 and paid in full at March 31, 2002.

The Partnership currently has insufficient working capital to fund its
operations. WNC and Associates, Inc., the general partner of the General Partner
of the Partnership, has agreed to provide advances sufficient enough to fund the
operations and working capital requirements of the Partnership through April 1,
2003.

29

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, David N. Shafer, Wilfred N. Cooper, Jr. and Kay L.
Cooper. The principal shareholders of WNC & Associates, Inc. is a trust
established by Wilfred N. Cooper, Sr.

Wilfred N. Cooper, Sr., age 71, is the founder, 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.

Wilfred N. Cooper, Jr., age 39, is President, 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 50, is Executive Vice President, a Director, General
Counsel, and a member of the Acquisition Committee of WNC & Associates, Inc.,
and a Director and Secretary of WNC Management, Inc. Mr. Shafer has been
involved in real estate investment and acquisition activities since 1984. Prior
to joining the Sponsor in 1990, he was practicing law with a specialty in real
estate and taxation. Mr. Shafer is a Director and President of the California
Council of Affordable Housing and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree (cum laude) and from the University of San Diego in 1986
with a Master of Law degree in Taxation.

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

30

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

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

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

Kay L. Cooper, age 65, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., 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.

31

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 $44,000, $44,000 and $43,000 were incurred
during the years ended March 31, 2002, 2001 and 2000, respectively. The
Partnership paid the General Partner or its affiliates $0, $4,000 and
$4,000 of those fees during the years ended March 31, 2002, 2001 and 2000,
respectively.

(b) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing Complex. 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 $39,000, $58,000 and
$31,000 during the years ended March 31, 2002, 2001 and 2000, respectively.

(d) Interest in Partnership. The General Partners receives 1% of the
Partnership's allocated Low Income Housing Credits, which approximated
$22,000, $22,000 and $20,000 for the General Partner for the years ended
March 31, 2002, 2001 and 2000. The General Partner is also entitled to
receive 1% of cash distributions. There were no distributions of cash to
the General Partner during the years ended March 31, 2002, 2001 and 2000.

Item 12. Security Ownership of Certain Beneficial Owners and Management

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

32

(b) Security Ownership of Management
--------------------------------

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

(c) Changes in Control
------------------

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

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

Item 13. Certain Relationships and Related Transactions

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

33

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

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

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

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

1. NONE

(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.

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.

34

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.

21.1 Financial statements of Pioneer Street Associates, a California Limited
Partnership as of and for the years ended December 31, 2001 and 2000
together with independent auditors' report thereon; a significant
subsidiary of the Partnership.

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

35

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 June 13, 2002, relating to the 2002,
2001 and 2000 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.

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

/s/BDO SEIDMAN, LLP

Orange County, California
June 13, 2002

36

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002

-------------------------------------- --------------------------------------------------
As of March 31, 2002 As of December 31, 2001
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Brewton,
East Brewton, Ltd. Alabama $ 1,192,000 $ 1,192,000 $ 1,139,000 $ 2,341,000 $ (254,000) $ 2,087,000

Autumn Trace Silsbee,
Associates, Ltd. Texas 412,000 412,000 1,243,000 2,058,000 (618,000) 1,440,000

Broken Bow Apartments I, Broken Bow,
Limited Partnership Nebraska 608,000 608,000 586,000 1,384,000 (171,000) 1,213,000

Candleridge Apartments Waukee,
of Waukee L.P. II Iowa 125,000 125,000 676,000 895,000 (202,000) 693,000

Chadwick Limited Edan, North
Partnership Carolina 378,000 378,000 1,540,000 2,021,000 (344,000) 1,677,000

Comanche Retirement Comanche,
Village, Ltd. Texas 136,000 136,000 589,000 761,000 (174,000) 587,000

Crossings II Limited Dividend
Housing Association Limited Portage,
Partnership Michigan 432,000 432,000 5,812,000 6,952,000 (862,000) 6,090,000

EW, a Wisconsin Limited Evansville,
Partnership Wisconson 164,000 164,000 613,000 900,000 (262,000) 638,000

Garland Street Malvarn,
Limited Partnership Arkansas 164,000 164,000 690,000 927,000 (273,000) 654,000

Hereford Seniors Hereford,
Community, Ltd. Texas 167,000 167,000 796,000 1,005,000 (167,000) 838,000

37

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002

-------------------------------------- --------------------------------------------------
As of March 31, 2002 As of December 31, 2001
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Hickory Lane Newton,
Associates, Ltd Texas 174,000 174,000 593,000 950,000 (193,000) 757,000

Honeysuckle Court Vidor,
Associates, Ltd. Texas 339,000 339,000 1,159,000 1,833,000 (388,000) 1,445,000

Klimpel Manor, Fullerton,
Ltd California 1,774,000 1,774,000 1,297,000 3,588,000 (754,000) 2,834,000

Lamesa Seniors Lamesa,
Community, Ltd. Texas 143,000 143,000 669,000 820,000 (212,000) 608,000

Laredo Heights Navasota,
Apartments Ltd. Texas 225,000 225,000 981,000 1,374,000 (221,000) 1,153,000

Mountainview North
Apartments Wilkesboro,
Limited North
Partnership Carolina 195,000 195,000 989,000 1,212,000 (372,000) 840,000

Palestine Seniors Palestine,
Community, Ltd. Texas 225,000 225,000 1,119,000 1,385,000 (265,000) 1,120,000

Pecan Grove
Limited Forrest City,
Partnership Arkansas 240,000 240,000 1,104,000 1,417,000 (427,000) 990,000

Pioneer Street Bakersfield,
Associates California 2,222,000 2,222,000 1,836,000 4,087,000 (1,023,000) 3,064,000

Sidney Apartments
I, Limited Sidney,
Partnership Nebraska 530,000 530,000 431,000 1,420,000 (214,000) 1,206,000

Southcove Orange Cove,
Associates California 2,000,000 2,000,000 1,521,000 3,448,000 (879,000) 2,569,000

Walnut Turn Buna,
Associates, Ltd. Texas 188,000 188,000 686,000 1,040,000 (214,000) 826,000
------------ ----------- ------------ ------------- ------------ ------------
$12,033,000 $12,033,000 $26,069,000 $ 41,818,000 $ 8,489,000 $ 33,329,000
============ =========== ============ ============= ============ ============

38

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002

----------------------------------------------------------------------------------
For the year ended December 31, 2001
----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Apartment Housing of East
Brewton, Ltd. $ 116,000 $ (74,000) 1998 Completed 40 Years

Autumn Trace Associates, Ltd. 232,000 (33,000) 1994 Completed 27.5 Years

Broken Bow Apartments I, Limited
Partnership 49,000 (37,000) 1996 Completed 40 Years

Candleridge Apartments of Waukee
L.P. II 125,000 (9,000) 1995 Completed 27.5 Years

Chadwick Limited Partnership 189,000 (36,000) 1994 Completed 50 Years

Comanche Retirement Village, Ltd.
74,000 (13,000) 1994 Completed 30 Years

Crossings II Limited Dividend
Housing Association Limited
Partnership 738,000 (88,000) 1997 Completed 40 Years

EW, a Wisconsin Limited
Partnership 76,000 (33,000) 1994 Completed 27.5 Years

Garland Street Limited Partnership
76,000 (31,000) 1994 Completed 27.5 Years

Hereford Seniors Community, Ltd.
89,000 (11,000) 1995 Completed 40 Years

Hickory Lane Associates, Ltd 90,000 (26,000) 1995 Completed 27.5 Years

Honeysuckle Court Associates, Ltd.
202,000 (42,000) 1995 Completed 27.5 Years

Klimpel Manor, Ltd 398,000 (52,000) 1994 Completed 40 Years

Lamesa Seniors Community, Ltd.
110,000 (43,000) 1994 Completed 40 Years

Laredo Heights Apartments Ltd. 181,000 (20,000) 1996 Completed 45 Years

Mountainview Apartments Limited
Partnership 99,000 (10,000) 1994 Completed 40 Years

Palestine Seniors Community, Ltd.
134,000 (16,000) 1994 Completed 40 Years

39

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2002

----------------------------------------------------------------------------------
For the year ended December 31, 2001
----------------------------------------------------------------------------------
Year Estimated
Investment Useful Life
Partnership Name Rental Income Net loss Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Pecan Grove Limited Partnership 124,000 (41,000) 1994 Completed 27.5 Years

Pioneer Street Associates 487,000 (87,000) 1995 Completed 27.5 Years

Sidney Apartments I, Limited 71,000 (36,000)
Partnership 1996 Completed 40 Years

Southcove Associates 216,000 (120,000) 1994 Completed 27.5 Years

Walnut Turn Associates, Ltd. 91,000 (27,000) 1995 Completed 27.5 Years
------------ -----------
$ 3,967,000 $ (885,000)
============ ===========

40

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001

-------------------------------------- --------------------------------------------------
As of March 31, 2001 As of December 31, 2000(Restated)
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Apartment Housing of East Brewton,
East Brewton, Ltd. Alabama $ 1,192,000 $ 1,192,000 $ 1,145,000 $ 2,339,000 $ (168,000) $ 2,171,000

Autumn Trace Silsbee,
Associates, Ltd. Texas 412,000 412,000 1,253,000 2,059,000 (544,000) 1,515,000

Broken Bow Apartments I, Broken Bow,
Limited Partnership Nebraska 608,000 608,000 750,000 1,383,000 (130,000) 1,253,000

Candleridge Apartments Waukee,
of Waukee L.P. II Iowa 125,000 125,000 679,000 883,000 (171,000) 712,000

Chadwick Limited Edan, North
Partnership Carolina 378,000 378,000 1,551,000 2,020,000 (298,000) 1,722,000

Comanche Retirement Comanche,
Village, Ltd. Texas 136,000 136,000 591,000 748,000 (166,000) 582,000

Crossings II Limited Dividend
Housing Association Limited Portage,
Partnership Michigan 432,000 432,000 5,905,000 6,952,000 (666,000) 6,286,000

EW, a Wisconsin Limited Evansville,
Partnership Wisconson 164,000 164,000 613,000 882,000 (224,000) 658,000

Garland Street Malvarn,
Limited Partnership Arkansas 164,000 164,000 693,000 924,000 (237,000) 687,000

Hereford Seniors Hereford,
Community, Ltd. Texas 167,000 167,000 799,000 1,006,000 (142,000) 864,000

41

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001

-------------------------------------- --------------------------------------------------
As of March 31, 2001 As of December 31, 2000(Restated)
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

Hickory Lane Newton,
Associates, Ltd Texas 174,000 174,000 594,000 950,000 (160,000) 790,000

Honeysuckle Court Vidor,
Associates, Ltd. Texas 339,000 339,000 1,162,000 1,833,000 (323,000) 1,510,000

Klimpel Manor, Fullerton,
Ltd California 1,774,000 1,774,000 1,314,000 3,589,000 (649,000) 2,940,000

Lamesa Seniors Lamesa,
Community, Ltd. Texas 143,000 143,000 671,000 818,000 (184,000) 634,000

Laredo Heights Navasota,
Apartments Ltd. Texas 225,000 225,000 1,101,000 1,358,000 (179,000) 1,179,000

Mountainview North
Apartments Wilkesboro,
Limited North
Partnership Carolina 195,000 195,000 994,000 1,211,000 (197,000) 1,014,000

Palestine Seniors Palestine,
Community, Ltd. Texas 225,000 225,000 1,124,000 1,385,000 (231,000) 1,154,000

Pecan Grove
Limited Forrest City,
Partnership Arkansas 240,000 240,000 1,109,000 1,402,000 (370,000) 1,032,000

Pioneer Street Bakersfield,
Associates California 2,222,000 2,222,000 1,862,000 4,087,000 (876,000) 3,211,000

Sidney Apartments
I, Limited Sidney,
Partnership Nebraska 530,000 530,000 430,000 1,419,000 (176,000) 1,243,000

Southcove Orange Cove,
Associates California 2,000,000 2,000,000 1,527,000 3,445,000 (753,000) 2,692,000

Walnut Turn Buna,
Associates, Ltd. Texas 188,000 188,000 688,000 1,040,000 (179,000) 861,000
------------ ----------- ------------ ------------- ------------ ------------
$12,033,000 $12,033,000 $26,555,000 $ 41,733,000 $(7,023,000) $ 34,710,000
============ =========== ============ ============= ============ ============

42

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001

----------------------------------------------------------------------------------
For the year ended December 31, 2000(Restated)
----------------------------------------------------------------------------------
Year Estimated
Net Income Investment Useful Life
Partnership Name Rental Income (loss) Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Apartment Housing of East
Brewton, Ltd. $ 114,000 $ (89,000) 1998 Completed 40 Years

Autumn Trace Associates, Ltd. 209,000 (47,000) 1994 Completed 27.5 Years

Broken Bow Apartments I, Limited
Partnership 41,000 (76,000) 1996 Completed 40 Years

Candleridge Apartments of Waukee
L.P. II 129,000 (4,000) 1995 Completed 27.5 Years

Chadwick Limited Partnership 183,000 (27,000) 1994 Completed 50 Years

Comanche Retirement Village, Ltd.
67,000 (16,000) 1994 Completed 30 Years

Crossings II Limited Dividend
Housing Association Limited
Partnership 648,000 (145,000) 1997 Completed 40 Years

EW, a Wisconsin Limited
Partnership 74,000 (67,000) 1994 Completed 27.5 Years

Garland Street Limited Partnership
69,000 (30,000) 1994 Completed 27.5 Years

Hereford Seniors Community, Ltd.
96,000 0 1995 Completed 40 Years

Hickory Lane Associates, Ltd 75,000 (32,000) 1995 Completed 27.5 Years

Honeysuckle Court Associates, Ltd.
191,000 (47,000) 1995 Completed 27.5 Years

Klimpel Manor, Ltd 374,000 (55,000) 1994 Completed 40 Years

Lamesa Seniors Community, Ltd.
103,000 (26,000) 1994 Completed 40 Years

Laredo Heights Apartments Ltd. 167,000 6,000 1996 Completed 45 Years

Mountainview Apartments Limited
Partnership 96,000 (18,000) 1994 Completed 40 Years

Palestine Seniors Community, Ltd. 148,000 11,000 1994 Completed 40 Years

43

WNC Housing Tax Credit Fund IV, L.P., Series 2
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2001

----------------------------------------------------------------------------------
For the year ended December 31, 2000(Restated)
----------------------------------------------------------------------------------
Year Estimated
Net Income Investment Useful Life
Partnership Name Rental Income (loss) Acquired Status (Years)
- ---------------------------------------------------------------------------------------------------------------------

Pecan Grove Limited Partnership 123,000 (58,000) 1994 Completed 27.5 Years

Pioneer Street Associates 491,000 (80,000) 1995 Completed 27.5 Years

Sidney Apartments I, Limited
Partnership 57,000 (61,000) 1996 Completed 40 Years

Southcove Associates 226,000 (103,000) 1994 Completed 27.5 Years

Walnut Turn Associates, Ltd. 92,000 (32,000) 1995 Completed 27.5 Years
------------ -----------
$ 3,773,000 $ (996,000)
============ ===========

44

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(Restated)
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location 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 Silsbee,
Associates, Ltd. Texas 412,000 412,000 1,261,000 2,059,000 (469,000) 1,590,000

Broken Bow Apartments I, Broken Bow,
Limited Partnership Nebraska 608,000 608,000 750,000 1,383,000 (90,000) 1,293,000

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

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

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

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

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

Garland Street Malvarn,
Limited 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 (177,000) 888,000

45

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(Restated)
-------------------------------------- --------------------------------------------------
Partnership's
Total Investment Amount of Encumbrances
in Local Limited Investment of Local Limited Property and Accumulated Net Book
Partnership Name Location Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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, Limited Sidney,
Partnership Nebraska 530,000 530,000 463,000 1,419,000 (138,000) 1,281,000

Southcove Orange Cove,
Associates California 2,000,000 2,000,000 1,532,000 3,445,000 (626,000) 2,819,000

Walnut Turn Buna,
Associates, Ltd. Texas 188,000 188,000 690,000 1,015,000 (143,000) 872,000
------------ ----------- ------------ ------------- ------------ ------------
$12,033,000 $12,033,000 $27,277,000 $ 41,579,000 $(5,779,000) $ 35,800,000
============ =========== ============ ============= ============ ============

46

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, 2000(Restated)
----------------------------------------------------------------------------------
Year Estimated
Net Income Investment Useful Life
Partnership Name Rental Income (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 43,000 (111,000) 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

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

47

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(Restated)
----------------------------------------------------------------------------------
Year Estimated
Net Income Investment Useful Life
Partnership Name Rental Income (loss) Acquired Status (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 62,000 (47,000)
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
----------- ------------
$ 3,737,000 $ (947,000)
=========== ============

48

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: July 12, 2002

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

Date: July 12, 2002

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

By /s/ Wilfred N. Cooper, Jr.
--------------------------
Wilfred N. Cooper, Jr., President and Director of WNC & Associates, Inc.

Date: July 12, 2002

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

Date: July 12, 2002

49