8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 18, 2008

NATIONAL PROPERTY INVESTORS III

(Exact name of Registrant as specified in its charter)

       California

   0-11095  

  22-2385051

(State or other jurisdiction

 (Commission

     (I.R.S. Employer

   of incorporation)

 File Number)

  Identification Number)

55 Beattie Place

Post Office Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

[ ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02 Termination of a Material Definitive Agreement.

NPI Equity Investments, Inc. (the “Managing General Partner”) and National Property Investors III (the “Registrant”) had previously entered into a revolving credit facility in an amount not to exceed $300,000 (the “Partnership Revolver”).  

On March 18, 2008, the Managing General Partner and the Registrant terminated the Partnership Revolver.  

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

    The following exhibit is filed with this report:

10.17  Termination Agreement dated March 18, 2008 by and among NPI Equity Investments, Inc., a Florida Corporation, and National Property Investors 5, a California limited partnership.

SIGNATURE

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 hereunto duly authorized.

National Property Investors III

By:

NPI EQUITY INVESTMENTS, INC.

Managing General Partner

By:

/s/Stephen B. Waters

Stephen B. Waters

Vice President

Date:

March 20, 2008

EX-10.17

Exhibit 10.17

TERMINATION AGREEMENT

This TERMINATION AGREEMENT (this “Agreement”) is made and entered into effective as of March 18, 2008, by and among NPI Equity Investments, Inc., a Florida corporation (the “Lender”) and National Property Investors III, a California limited partnership (the “Debtor”).

RECITALS

WHEREAS, the Debtor and the Lender previously entered into a revolving line of credit in the amount not to exceed Three Hundred Thousand Dollars ($300,000) (the “Line of Credit”);

WHEREAS, as of the date hereof, the Line of Credit has an outstanding balance of Zero Dollars ($0.00); and

WHEREAS, the Debtor and the Lender desire to terminate the Line of Credit.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, the parties hereto agrees as follows:

1.

Upon the execution and delivery of this Agreement, the Line of Credit shall be cancelled and terminated, and shall no longer have legal force or effect.

2.

If it is subsequently determined by the Lender after the date hereof that there is an additional amount due to the Lender by the Debtor under the Line of Credit, that amount shall be due and payable by the Debtor to the Lender on demand.

3.

Each of the undersigned hereby covenants and agrees to execute all additional agreements, certificates, and instruments as any of the undersigned deems necessary and appropriate to effectuate the terms and conditions of this Agreement.

4.

This Agreement constitutes the entire agreement between the parties and supercedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof.

5.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of California without regard to its rules pertaining to conflicts of law.

6.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute on and the same instrument.

IN WITNESS WHEREOF, the parties here to executed and delivered this Agreement on the date first above written.

THE LENDER:

NPI Equity Investments, Inc.

By:    /s/Martha L. Long

Name:  Martha L. Long

Title:  Senior Vice President

THE DEBTOR:

National Property Investors III

By:  NPI Equity Investments, Inc.

       Managing General Partner

By:  /s/Martha L. Long

Name:  Martha L. Long

Title:  Senior Vice President