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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 2002

OR

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

For the transition period from ________ to ___________

Commission file number: 0-23908


WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.



California 33-0531301

(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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes No X
--------- ----------


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

Yes No X
--------- ----------








WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

INDEX TO FORM 10-Q

For the Quarter Ended September 30, 2002



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets
September 30, 2002 and March 31, 2002............................3

Statements of Operations
For the three and six months ended September 30, 2002 and 2001...4

Statement of Partners' Equity (Deficit)
For the six months ended September 30, 2002......................5

Statements of Cash Flows
For the six months ended September 30, 2002 and 2001.............6

Notes to Financial Statements.........................................7

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................12

Item 3. Quantitative and Qualitative Disclosures about Market Risks..13

Item 4. Controls and Procedures......................................13

PART II. OTHER INFORMATION

Item 1. Legal Proceedings............................................14

Item 4. Submission of Matters to a Vote of Security Holders..........14

Item 5. Other Information............................................14

Item 6. Exhibits and Reports on Form 8-K.............................14

Signatures ..........................................................15

Certifications.......................................................16

2




WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

BALANCE SHEETS






September 30, 2002 March 31, 2002
----------------------- -------------------
(unaudited)

ASSETS

Cash and cash equivalents $ 380,922 $ 413,336
Investments in limited partnerships, net (Note 2) 6,151,427 6,455,167
----------------------- -------------------

$ 6,532,349 $ 6,868,503
======================= ===================


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
Accrued fees and expenses due to
General Partner and affiliates (Note 3) $ 1,046,241 $ 994,710

Commitments and contingencies

Partners' equity (deficit):
General partner (115,270) (111,393)
Limited partners (30,000 units authorized;
18,000 units issued and outstanding) 5,601,378 5,985,186
----------------------- -------------------

Total partners' equity 5,486,108 5,873,793
----------------------- -------------------

$ 6,532,349 $ 6,868,503
======================= ===================


See accompanying notes to financial statements
3



WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

STATEMENTS OF OPERATIONS

For the Three and Six Months Ended September 30, 2002 and 2001
(unaudited)



2002 2002 2001 2001
------------------- ------------------ ----------------- ----------------
Three Months Six months Three Months Six months
------------------- ------------------ ----------------- ----------------


Interest income $ 1,501 $ 3,254 $ 3,276 $ 6,939
Distribution income 1,640 1,640 - -
------------------- ------------------ ----------------- ----------------

3,141 4,894 3,276 6,939
------------------- ------------------ ----------------- ----------------

Operating expenses:
Amortization (Note 2) 15,116 30,232 14,718 29,436
Asset management fees (Note 3) 45,346 90,692 45,346 90,692
Legal and accounting 9,597 14,777 13,569 13,569
Other 480 3,712 3,450 4,250
------------------- ------------------ ----------------- ----------------

Total operating expenses 70,539 139,413 77,083 137,947
------------------- ------------------ ----------------- ----------------

Loss from operations (67,398) (134,519) (73,807) (131,008)
------------------- ------------------ ----------------- ----------------

Equity in losses of
limited partnerships (Note 2) (126,583) (253,166) (222,222) (409,623)
------------------- ------------------ ----------------- ----------------

Net loss $ (193,981) $ (387,685) $ (296,029) $ (540,631)
=================== ================== ================= ================

Net loss allocated to:
General partner $ (1,940) $ (3,877) $ (2,960) $ (5,406)
=================== ================== ================= ================

Limited partners $ (192,041) $ (383,808) $ (293,069) $ (535,225)
=================== ================== ================= ================

Net loss per limited
partner unit $ (11) $ (21) $ (16) $ (30)
=================== ================== ================= ================

Outstanding weighted limited
partner units
18,000 18,000 18,000 18,000
=================== ================== ================= ================


See accompanying notes to financial statements
4
PAGE>


WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

STATEMENT OF PARTNERS' EQUITY (DEFICIT)

For the Six Months Ended September 30, 2002
(unaudited)





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



Partners' equity (deficit) at March 31, 2002 $ (111,393) $ 5,985,186 $ 5,873,793


Net loss (3,877) (383,808) (387,685)
----------------- ---------------- ----------------


Partners' equity (deficit) at September 30, 2002 $ (115,270) $ 5,601,378 $ 5,486,108
================= ================ ================


See accompanying notes to financial statements
5



WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS

For the Six Months Ended September 30, 2002 and 2001
(unaudited)




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

Cash flows from operating activities:
Net loss $ (387,685) $ (540,631)
Adjustments to reconcile net loss to
cash used in operating activities:
Amortization 30,232 29,436
Equity in losses of limited partnerships 253,166 409,623
Change in accrued fees and expenses due to
General Partner and affiliates 51,531 55,169
------------------ ------------------

Net cash used in operating activities (52,756) (46,403)
------------------ ------------------

Cash flows from investing activities:
Distributions from limited partnerships 20,342 27,892
------------------ ------------------

Net cash provided by investing activities 20,342 27,892
------------------ ------------------

Net decrease in cash and cash equivalents (32,414) (18,511)
------------------ ------------------

Cash and cash equivalents, beginning of period 413,336 437,863
------------------ ------------------
Cash and cash equivalents, end of period $ 380,922 $ 419,352
================== ==================

SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:

Taxes paid $ 800 $ 800
================== ==================


See accompanying notes to financial statements
6



WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

For the Quarter Ended September 30, 2002
(unaudited)



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

General
- -------

The accompanying condensed unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act
of 1934. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and six
months ended September 30, 2002 are not necessarily indicative of the results
that may be expected for the fiscal year ending March 31, 2003. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-K for the fiscal year ended March 31,
2002.

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

WNC California Housing Tax Credits III, L.P. a California Limited Partnership
(the "Partnership"), was formed on October 5, 1992 under the laws of the state
of California and began operations on July 19, 1993. The Partnership was formed
to invest primarily in other limited partnerships (the "Local Limited
Partnerships") which own and operate multi-family housing complexes (the
"Housing Complex") that are eligible for low-income housing credits. The local
general partners (the "Local General Partners") of each Local Limited
Partnership retain responsibility for maintaining, operating and managing the
Housing Complex.

The general partner of the Partnership is WNC Tax Credit Partners III, L.P. (the
"General Partner"). WNC & Associates, Inc. ("Associates") and Wilfred N. Cooper
Sr. are the general partners of the General Partner. The chairman and president
own substantially all of the outstanding stock of Associates. The business of
the Partnership is conducted primarily through Associates as the Partnership has
no employees of its own.

The Partnership shall continue to be in full force and effect until December 31,
2037 unless terminated prior to that date pursuant to the partnership agreement
or law.

The Partnership Agreement authorized the sale of up to 30,000 units at $1,000
per Unit ("Units"). The offering of Units concluded in July 1994 at which time
17,990 Units, representing subscriptions in the amount of $17,990,000 had been
accepted. During 1995, an additional $10,000 was collected on subscriptions
accepted for 10 additional units and previously deemed uncollectible. 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 of the Partnership. The limited partners will be allocated the remaining
99% of these items in proportion to their respective investments.

After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received proceeds
equal to its capital contribution and a subordinated disposition fee 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.



7



WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Quarter Ended September 30, 2002
(unaudited)

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 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
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 2).

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 $2,366,564 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.

8



WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Quarter Ended September 30, 2002
(unaudited)


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

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

The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents. The Partnership had
no cash equivalents at the end of all periods presented.

Concentration of Credit Risk
- ----------------------------

At September 30, 2002, the Partnership maintained a cash balance at a certain
financial institution in excess of the maximum federally insured amounts.

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

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

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

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
for all periods presented, 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. SFAS 144
is not expected to have a material impact on the Partnership's financial
position or results of operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 addresses accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
and measured initially at fair value when the liability is incurred. SFAS No.
146 is effective for exit or disposal activities that are initiated after
December 31, 2002, with early application encouraged. The Company does not
expect the adoption of this statement to have a material effect on the Company's
financial statements.

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------

As of the periods presented, the Partnership had acquired limited partnership
interests in eighteen Local Limited Partnerships, each of which owns one Housing
Complex consisting of an aggregate of 635 apartment units. The respective
general partners of the Local Limited Partnerships manage the day-to-day
operations of the entities. Significant Local Limited Partnership's business
decisions require approval from the Partnership. The Partnership, as a limited
partner, is generally entitled to 99%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses, taxable income and
losses and tax credits of the Limited Partnerships.







9




WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Quarter Ended September 30, 2002
(unaudited)


NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------

Equity in losses of the 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 would be recognized as income.

The following is a summary of the equity method activity of the investments in
Local Limited Partnerships for the periods presented.



For the Six For the Year
Months Ended Ended
September 30, 2002 March 31, 2002
------------------- -------------------


Investments per balance sheet, beginning of period $ 6,455,167 $ 7,329,890

Distributions received (20,342) (17,048)
Equity in losses of limited partnerships (253,166) (798,807)
Amortization of paid acquisition fees and costs (30,232) (58,868)
------------------- -------------------

Investments per balance sheet, end of period $ 6,151,427 $ 6,455,167
=================== ===================


Selected financial information for the six months ended September 30, 2002 and
2001 from the unaudited combined condensed financial statements of the limited
partnerships in which the Partnership has invested as follows:




COMBINED CONDENSED STATEMENTS OF OPERATIONS
2002 2001
---------------------- --------------------


Revenue $ 1,570,000 $ 1,520,000
---------------------- --------------------
Expenses:
Operating expenses 1,013,000 946,000
Interest expense 429,000 433,000
Depreciation and amortization 566,000 577,000
---------------------- --------------------

Total expenses 2,008,000 1,956,000
---------------------- --------------------

Net loss $ (438,000) $ (436,000)
====================== ====================

Net loss allocable to the Partnership $ (434,000) $ (431,000)
====================== ====================

Net loss recorded by the Partnership $ ( 253,000) $ (410,000)
====================== ====================


10





WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Quarter Ended September 30, 2002
(unaudited)

NOTE 2 - INVESTMENT IN LIMITED PARTNERSHIP, continued
- -----------------------------------------------------

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 operations of such Local Limited Partnerships. If additional
capital contributions are not made when they are required, the Partnership's
investment in certain of such Local Limited Partnerships could be impaired, and
the loss and recapture of the related tax credits could occur.

NOTE 3 - RELATED PARTY TRANSACTIONS
- -----------------------------------

The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or its affiliates during the current or future years for the following
fees:

(a) Annual Asset Management Fee. An annual asset management fee in an amount
equal to 0.5% of the Invested Assets of the Partnership, as defined.
"Invested Assets" means the sum of the Partnership's Investment in Local
Limited Partnership Interests and the Partnership's allocable share of the
amount of the mortgage loans on and other debts related to, the Housing
Complexes owned by such Local Limited Partnerships. Fees of $90,692 were
incurred during each of the six months ended September 30, 2002 and 2001.
The Partnership paid the General Partner or its affiliates $37,500 of those
fees during the six months ended September 30, 2002 and $35,834 during the
six months ended September 30, 2001.

(b) Subordinated Disposition Fee. 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 September 30, 2003 and 6% thereafter (as defined in the Partnership
Agreement) and is payable only if the General Partner or its affiliates
render services in the sales effort.


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



September 30, 2002 March 31, 2002
---------------------- ----------------------


Reimbursement for expenses paid by the General
Partners and affiliates $ - $ 1,661
Asset management fee payable 1,046,241 993,049
---------------------- ----------------------
$ 1,046,241 $ 994,710
====================== ======================



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

NOTE 4 - INCOME TAXES
- ---------------------

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

11




WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

For the Quarter Ended September 30, 2002
(unaudited)




NOTE 5 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------

TThe Partnership has a 99% limited partnership investment in Colonial Village
Roseville, a California Limited Partnership, ("Colonial Village Roseville").
Colonial Village Roseville is a defendant in a lawsuit filed by previous
tenants. Colonial Village Roseville carries general liability insurance and has
tendered the defense of the claim to the insurance company. Discovery for the
lawsuit is just beginning, and the management of Colonial Village Roseville and
WNC are unable to determine the outcome of this lawsuit at this time or its
impact, if any, on the Partnership's financial statements


12


Item 2. 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-Q 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-Q and in other reports we filed with the
Securities and Exchange Commission. The following discussion should be read in
conjunction with the condensed Financial Statements and the Notes thereto
included elsewhere in this filing.

The following discussion and analysis compares the results of operations for the
six months ended September 30, 2002 and 2001, and should be read in conjunction
with the condensed financial statements and accompanying notes included within
this report.

Financial Condition

The Partnership's assets at September 30, 2002 consisted primarily of $381,000
in cash and aggregate investments in the eighteen Local Limited Partnerships of
$6,151,000. Liabilities at September 30, 2002 primarily consisted of $1,046,000
of accrued asset management fees due to the General Partner.

Results of Operations

Three Months Ended September 30, 2002 Compared to Three Months Ended September
30, 2001. The Partnership's net loss for the three months ended September 30,
2002 was $(194,000), reflecting a decrease of $102,000 from the $(296,000) of
net loss for the three months ended September 30, 2001. The decline in net loss
is primarily due to a decrease in equity in losses of limited partnerships of
$95,000 to $(127,000) for the three months ended September 30, 2002 from
$(222,000) for the three months ended September 30, 2001. The decrease in equity
in losses of limited partnerships is due to the Partnership not recognizing
certain losses of the Local Limited Partnerships. The investments in such Local
Limited Partnerships had reached $0 at September 30, 2002. Since the
Partnership's liability with respect to its investments is limited, losses in
excess of investment are not recognized. Along with the decrease in equity in
losses of limited partnerships, loss from operations decreased by $7,000 to
$(67,000) for the three months ended September 30, 2002 from $(74,000) for the
three months ended September 30, 2001, due to a comparable decrease in legal,
accounting and other operating expenses.


13



Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued

Six Months Ended September 30, 2002 Compared to Six Months Ended September 30,
2001. The Partnership's net loss for the six months ended September 30, 2002 was
$(388,000), reflecting a decrease of $153,000 from the $(541,000) of net loss
for the six months ended September 30, 2001. The decline in net loss is
primarily due to a decrease in equity in losses of limited partnerships of
$157,000 to $(253,000) for the six months ended September 30, 2002 from
$(410,000) for the six months ended September 30, 2001. The decrease in equity
in losses of limited partnerships is due to the Partnership not recognizing
certain losses of the Local Limited Partnerships. The investments in such Local
Limited Partnerships had reached $0 at September 30, 2002. Since the
Partnership's liability with respect to its investments is limited, losses in
excess of investment are not recognized. The decrease in equity in losses of
limited partnerships is augmented by an increase in loss from operations of
$4,000 for the six months ended September 30, 2002 to $(135,000) from $(131,000)
for the six months ended September 30, 2001, due to a decrease in interest
income of $2,000 and an increase in legal, accounting and other operating
expenses of approximately $2,000.

Cash Flows

Six Months Ended September 30, 2002 Compared to Six Months Ended September 30,
2001. Net cash used during the six months ended September 30, 2002 was $(32,000)
compared to net cash used in the six months ended September 30, 2001 of
$(18,000). The change of $14,000 was primarily due to a decrease in
distributions from limited partnerships of $(8,000) and an increase in operating
costs of $(6,000).


During the six months ended September 30, 2002 accrued payables, which consist
primarily of asset management fees to the General Partner or affiliates,
increased by $52,000. The General Partner does not anticipate that these accrued
fees will be paid in full until such time as capital reserves are in excess of
future foreseeable working capital requirements of the partnership.

The Partnership expects its future cash flows, together with its net available
assets at September 30, 2002, to be sufficient to meet all currently foreseeable
future cash requirements.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

NONE

Item 4. Controls and Procedures

Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a- 14. Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.



14





Part II. OTHER INFORMATION

Item 1. Legal Proceedings

Colonial Village Roseville, a California Limited Partnership and its
general partner, PROJECT GO, INC., a California corporation are being
sued by former tenants in Placer County Superior Court, Auburn,
California. The Complaint was filed September 6, 2002. The Plaintiffs
are suing for various damages alleging that the property was not
habitable and unsafe to occupy.


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

The Consent Solicitation Statement dated September 1, 2002 was first
sent to the Limited Partners on or about September 1, 2002.

The General Partner has proposed that the Partnership cease
reproduction and mailing of quarterly and annual financial statements
to the Limited Partners, to reduce the expenses incurred by the
Partnership. The Partnership will continue to prepare quarterly and
annual financial statements so long as it is required to do so under
the Securities and Exchange Commission Act of 1934 and submit them to
the Securities and Exchange Commission. All votes were to be returned
to the General Partner by August 1, 2002 to be counted. The proposal
was approved by the Limited Partners and the results of the vote were
11,075 for the proposal, 1,303 against the proposal, and 215
abstentions.

Item 5. Other Information

Wilfred N. Cooper, Jr. has assumed the role of Chief Executive Officer
of WNC & Associates. Wilfred N. Cooper, Sr. who previously held the
role of Chief Executive Officer remains the Chairman of The Board.


Item 6. Exhibits and Reports on Form 8-K

(a) Reports on Form 8-K.

1. NONE

(b) Exhibits.

99.1 Certification pursuant to 18 U.S.C. Section 1350 as adapted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.



15




Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

WNC CALIFORNIA HOUSING TAX CREDITS III, L.P.

By: WNC California Tax Credit Partners III General Partner

By: WNC & Associates, Inc. General Partner





By: /s/ Wilfred N. Cooper, Jr.
---------------------------

Wilfred N. Cooper, Jr.
President and Chief Executive Officer of WNC & Associates, Inc.

Date: November 14, 2002





By: /s/ Thomas J. Riha
------------------

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

Date: November 14, 2002


16



CERTIFICATIONS*

I, Wilfred N. Cooper, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of WNC CALIFORNIA
HOUSING TAX CREDITS III, L.P.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and

(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ Wilfred N. Cooper, Jr.
---------------------------
[Signature]

President and Chief Executive Officer of WNC & Associates, Inc.


17



CERTIFICATIONS*

I, Thomas J. Riha, certify that:

1. I have reviewed this quarterly report on Form 10-Q of WNC
CALIFORNIA HOUSING TAX CREDITS III, L.P.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and we have:

(d) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

(e) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and

(f) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the
equivalent function):

(c) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

(d) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ Thomas J. Riha
-------------------
[Signature]

Vice-President - Chief Financial Officer of WNC & Associates, Inc.


18