Explanation:

Correct option 3: The houses of C and D are less than 20 km apart
The houses of A and B face each other on a road going north-south, A's being on the western side. A comes out of his house, turns left, travels 5 km, turns right, travels 5 km to the front of D's house. B does exactly the same and reaches the front of C's house.
The diagram is as follows:

Analyzing the options:
1) C and D live on the same street. → False
ii) C's house faces south. → False
iii) The houses of C and D are less than 20 km apart. → True
iv) None of the above. - False
Hence, 'The houses of C and D are less than 20 km apart.' is the correct answer.