--------------------------------------------------------------------------------


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                ----------------


                                   FORM 10-KSB


                                ----------------


                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2007


                                ----------------


                         Commission file number 0-11973

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP
             Organized pursuant to the Laws of the State of Maryland


                                ----------------


        Internal Revenue Service - Employer Identification No. 52-1321492

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


                                ----------------


                  Securities registered under Section 12(g) of
                               the Exchange Act:

                        UNITS OF LIMITED PARTNER INTEREST


                                ----------------


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X]

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will 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-KSB or any  amendment to
this Form 10-KSB [X]

State issuer's revenues for its most recent fiscal year $249,666.

The units of limited  partner  interest of the  registrant are not traded in any
market.  Therefore,  the units of limited partner  interest had neither a market
selling  price nor an average bid or asked price within the 60 days prior to the
date of this filing.

--------------------------------------------------------------------------------
<PAGE>

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                        2007ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS



                                                                         Page
                                                                         ----

                                     PART I


Item 1.  Business........................................................ I-1
Item 2.  Properties...................................................... I-3
Item 3.  Legal Proceedings............................................... I-3
Item 4.  Submission of Matters to a Vote of Security Holders............. I-3


                                     PART II

Item 5.  Market for the Registrant's Partnership Interests
           and Related Partnership Matters .............................  II-1
Item 6.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations....................................  II-2
Item 7.  Financial Statements............................................ II-5
Item 8.  Changes In and Disagreements With Accountants
           on Accounting and Financial Disclosure.......................  II-5
Item 8A. Controls and Procedures......................................... II-5
Item 8B. Other Information............................................... II-6


                                    PART III

Item 9.  Directors and Executive Officers of the Registrant.............. III-1
Item 10. Executive Compensation.......................................... III-2
Item 11. Security Ownership of Certain Beneficial Owners and Management.. III-2
Item 12. Certain Relationships and Related Transactions.................. III-3
Item 13. Exhibits........................................................ III-3
Item 14. Principal Accountant Fees and Services.......................... III-4

Signatures............................................................... III-5

Report of Independent Registered Public Accounting Firm.................. III-7

Financial Statements..................................................... III-8

<PAGE>
                                     PART I
                                     ------

ITEM 1. BUSINESS
        --------

     Capital Realty  Investors-II  Limited  Partnership  (the  Partnership) is a
limited  partnership which was formed under the Maryland Revised Uniform Limited
Partnership  Act on March 23, 1983. On May 6, 1983,  the  Partnership  commenced
offering 50,000 units of additional  limited partner  interest  through a public
offering managed by Merrill Lynch, Pierce, Fenner and Smith,  Incorporated.  The
Partnership  closed  the  offering  on  June  20,  1983,  when it  became  fully
subscribed.  As of December 31, 2007, 85 units of limited  partner  interest had
been abandoned.

     The General  Partners of the Partnership are C.R.I.,  Inc. (CRI),  which is
the  Managing  General  Partner,  and  current and former  shareholders  of CRI.
Services for the  Partnership  are performed by CRI, as the  Partnership  has no
employees of its own.

     The  Partnership  was  formed  to  invest  in  real  estate,  which  is the
Partnership's  principal  business  activity,  by acquiring and holding  limited
partner interests in limited partnerships (Local Partnerships).  The Partnership
originally made investments in 22 Local  Partnerships.  As of December 31, 2007,
the  Partnership  retains its  investment  in one Local  Partnership.  The Local
Partnership owns a state  government-assisted  apartment complex, which provides
housing  principally to the elderly and/or to individuals and families of low or
moderate income. The original  objectives of these investments,  not necessarily
in order of importance, were to:

     (i)  preserve and protect the Partnership's capital;
     (ii) provide,  during  the  early  years of the  Partnership's  operations,
          current tax  benefits to the  partners in the form of tax losses which
          the partners could use to offset income from other sources;
     (iii) provide capital  appreciation  through  increases in the value of the
          Partnership's   investments  and  increased  equity  through  periodic
          payments on the indebtedness on the apartment complexes; and
     (iv) provide  cash   distributions   from  sale  or   refinancing   of  the
          Partnership's  investments  and,  on  a  limited  basis,  from  rental
          operations.

See Part II, Item 6, Management's Discussion and Analysis of Financial Condition
and Results of  Operations,  for a discussion of factors  affecting the original
investment objectives.

     The Local Partnerships in which the Partnership  invested were organized by
private  developers  who acquired  the sites,  or options  thereon,  applied for
mortgage  financing and applicable  mortgage  insurance and/or subsidies and who
generally remained as the local general partners in the Local  Partnerships.  In
most  cases,  the local  general  partners  of the Local  Partnerships  retained
responsibility  for maintaining,  operating and managing the projects.  However,
under certain  circumstances,  the Local  Partnerships'  partnership  agreements
permit removal of the local general partner and  replacement  with another local
general  partner or with an  affiliate  of the  Partnership's  Managing  General
Partner.

     See Part I, Item 4, hereof,  for a discussion of the Partnership's  Plan of
Liquidation  and  Dissolution,  which was approved by a majority of the units of
limited partner interest on March 22, 2004.

                                      I-1
<PAGE>
                                     PART I
                                     ------

ITEM 1. BUSINESS - Continued
        --------

     As a result of its investment in the Local  Partnerships,  the  Partnership
became the  principal  limited  partner in 22 (one  remaining as of December 31,
2007)  Local  Partnerships.  As  a  limited  partner,  the  Partnership's  legal
liability  for  obligations  of  the  Local   Partnerships  is  limited  to  its
investment. An affiliate of the Managing General Partner of the Partnership is a
general  partner  in the one  remaining  Local  Partnership.  Affiliates  of the
Managing  General Partner may operate other apartment  complexes which may be in
competition for eligible tenants with the Local Partnership's apartment complex.

     Although the Local  Partnerships in which the Partnership  remains invested
owns an  apartment  complex that must  compete in the  marketplace  for tenants,
interest subsidies and/or rent supplements from governmental  agencies generally
make it possible to offer certain of the dwelling units to eligible tenants at a
cost significantly below the market rate for comparable  conventionally financed
dwelling units.  Based on available data, the Managing  General Partner believes
there to be no material  risk of market  competition  in the  operations  of the
apartment complex described below which would adversely impact the Partnership.

     A schedule of the apartment complex owned by the Local Partnership in which
the Partnership has an investment as of December 31, 2007, follows.


              SCHEDULE OF THE APARTMENT COMPLEX OWNED BY THE LOCAL
            PARTNERSHIP IN WHICH CAPITAL REALTY INVESTORS-II LIMITED
                        PARTNERSHIP HAS AN INVESTMENT(1)

<TABLE>
<CAPTION>
                                                                                                  Units
                             Mortgage                                                         Authorized for     Expiration
 Name and Location          Payable at        Financed and/or Insured           Number of       Low Income           of
of Apartment Complex       12/31/07 (2)       and/or Subsidized Under          Rental Units     Subsidies       HAP Contract
--------------------       ------------    -------------------------------     ------------   --------------    ------------
<S>                        <C>             <C>                                 <C>            <C>               <C>
Westgate Tower Apts.        $1,176,655     Michigan State Housing Develop-          148              0                 --
 Westland, MI                               ment Authority/236
                            ----------                                              ---             --
Totals (1 Property)         $1,176,655                                              148              0
                            ==========                                              ===             ==

</TABLE>

<TABLE>
<CAPTION>
                                                                                         Average Effective Annual
                                          Units Occupied As                                  Rental Per Unit
                                      Percentage of Total Units                            for the Years Ended
                                          As of December 31,                                    December 31,
                                ------------------------------------      ------------------------------------------------------
 Name and Location
of Apartment Complex            2007    2006     2005   2004    2003        2007        2006        2005        2004       2003
---------------------           ----    ----     ----   ----    ----      -------     -------     -------     -------    -------
<S>                             <C>     <C>      <C>    <C>     <C>       <C>         <C>         <C>         <C>        <C>
Westgate Tower Apts.             95%     92%      95%    96%     91%      $ 4,743     $ 4,597     $ 4,498     $ 4,412    $ 4,033
 Westland, MI
                                ----    ----     ----   ----    ----      -------     -------     -------     -------    -------
Totals (1 Property) (1)          95%     92%      95%    96%     91%      $ 4,743     $ 4,597     $ 4,498     $ 4,412    $ 4,033
                                ===     ===      ===    ===     ===       =======     =======     =======     =======    =======
</TABLE>

     (1)  The property is a multifamily  housing complex. No single tenant rents
          10% or more of the rentable  square  footage.  Residential  leases are
          typically one year or less in length,  with varying  expiration dates,
          and substantially all rentable space is for residential purposes.
     (2)  The amount  provided is the balance of the first mortgage loan payable
          by the Local Partnership as of December 31, 2007.

     On December 31, 2007, the Partnership's  interest in Golden Acres was sold.
See the notes to financial statements for additional  information concerning the
sale.

     On December 31, 2007, the  Partnership's  interest in Orangewood  Plaza was
sold.  See  the  notes  to  financial  statements  for  additional   information
concerning the sale.

                                      I-2
<PAGE>
                                     PART I
                                     ------

ITEM 1. BUSINESS - Continued
        --------

     On October  31,  2006,  the  partnership's  interest in Four Winds West was
transferred to an affiliate of the local managing general partner. See the notes
to the financial statements for additional information concerning the transfer.

     On  December  31,  2006,  the  Partnership's  interest  in Troy  Manor  was
transferred to an affiliate of the local managing general partner. See the notes
to financial statements for additional information concerning the transfer.


ITEM 2. PROPERTIES
        ----------

     Through  its  ownership  of  a  limited  partner   interest  in  one  Local
Partnership, Capital Realty Investors-II Limited Partnership indirectly holds an
interest in the real estate owned by the Local Partnership.  See Part I, Item 1,
for information concerning these properties.


ITEM 3. LEGAL PROCEEDINGS
        -----------------

     There are no material pending legal proceedings to which the Partnership is
a party.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------

     No matters were  submitted to a vote of security  holders during the fourth
quarter of 2007.

     On February 4, 2004, the  Partnership  filed a Definitive  Proxy  Statement
pursuant to Section 14(a) of the Securities  Exchange Act of 1934, and mailed it
to limited partners to solicit consents for approval of the following:

     (1)  The sale of all of the Partnership's assets and the dissolution of the
          Partnership pursuant to a Plan of Liquidation and Dissolution, and the
          amendment of the Partnership's Limited Partnership Agreement to permit
          the Managing General Partner, CRI, to be eligible to receive increased
          property  disposition  fees from the  Partnership on the same basis as
          such fees may currently be paid to Local General Partners, real estate
          brokers  or  other  third  party   intermediaries   employed  to  sell
          Partnership  properties,  to the extent that CRI markets and sells the
          Partnership's  properties  instead  of such  persons  (a  "Disposition
          Fee");

     (2)  The amendment of the Partnership's  Limited  Partnership  Agreement to
          permit CRI to be eligible to receive a partnership  liquidation fee in
          the amount of $500,000,  payable only if the Managing  General Partner
          is  successful in  liquidating  all of the  Partnership's  investments
          within 36 months from the date the liquidation was approved [March 22,
          2004], in recognition  that one or more of the properties in which the
          Partnership  holds an  interest  might not be  saleable to parties not
          affiliated  with the respective  Local  Partnership  due to the amount
          and/or  terms  of  their  current   indebtedness   (the   "Partnership
          Liquidation Fee"); and

     (3)  To authorize the Managing General Partner, in its sole discretion,  to
          elect to extend the period during which  Consents of Limited  Partners
          may be  solicited  and voted,  but not beyond sixty (60) days from the
          date that the Consent  Solicitation  Statement was sent to the Limited
          Partners.

     The matters for which consent was solicited are collectively referred to as
the "Liquidation."

                                      I-3
<PAGE>
                                     PART I
                                     ------

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - Continued
        ---------------------------------------------------

     The record date for voting was  December  31,  2003,  and the final  voting
deadline  was March 22,  2004.  A  tabulation  of votes  received  by the voting
deadline follows.

<TABLE>
<CAPTION>
                                    FOR                  AGAINST                ABSTAIN                 TOTAL
                             ------------------     ------------------     -------------------     -------------------
                             Units of               Units of               Units of                Units of
                             limited                limited                limited                 limited
                             partner                partner                partner                 partner
Description                  interest   Percent     interest   Percent     interest    Percent     interest    Percent
-----------                  --------   -------     --------   -------     --------    -------     --------    -------
<S>                          <C>        <C>         <C>        <C>         <C>         <C>         <C>         <C>
Sale, dissolution and
  five percent
  Disposition Fee             28,699     57.6%       1,264       2.5%         268        0.5%       30,231      60.6%

$500,000 Partnership
  Liquidation Fee             25,841     51.8%       3,546       7.1%         844        1.7%       30,231      60.6%

Extension of
  solicitation period         27,975     56.1%       1,767       3.5%         489        1.0%       30,231      60.6%

</TABLE>

     The  Partnership  was not  liquidated  within 36 months  from the  approved
liquidation  date of March 22, 2004,  therefore no liquidation  fee was taken by
the Managing General Partner. The Managing General Partner is continuing towards
liquidation of all the Partnership's investments.

     There can be no assurance that the Liquidation  will be completed  pursuant
to the Plan of Liquidation and Dissolution.

                                      I-4

<PAGE>
                                     PART II
                                     -------

ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS
        -------------------------------------------------
          AND RELATED PARTNERSHIP MATTERS
          -------------------------------

     (a)  There is no  established  market for the purchase and sale of units of
          additional  limited  partner  interest  (Units)  in  the  Partnership,
          although various informal  secondary market services exist. Due to the
          limited markets, however, investors may be unable to sell or otherwise
          dispose of their Units.

     (b)  As of March  31,  2008,  there  were  approximately  2,965  registered
          holders of Units in the Partnership.

     (c)  On April 4, 2006, the Partnership  made a tax distribution of $252,862
          (approximately  $7.20  per  Unit)  on  behalf  of  Additional  Limited
          Partners who were not residents of Ohio.

                                      II-1
<PAGE>
                                     PART II
                                     -------

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS
          -----------------------------------

     Capital  Realty  Investors-II   Limited   Partnership's  (the  Partnership)
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  section  is  based  on  the  financial   statements,   and  contains
information  that  may  be  considered  forward  looking,  including  statements
regarding  the effect of  governmental  regulations.  Actual  results may differ
materially from those  described in the forward  looking  statements and will be
affected  by  a  variety  of  factors  including  national  and  local  economic
conditions,  the  general  level of  interest  rates,  governmental  regulations
affecting  the  Partnership  and  interpretations  of  those  regulations,   the
competitive  environment in which the Partnership operates, and the availability
of working capital.

                          Critical Accounting Policies
                          ----------------------------

     The  Partnership has disclosed its selection and application of significant
accounting  policies in Note 1 of the notes to financial  statements included in
this annual report on Form 10-KSB at December 31, 2007. The Partnership accounts
for its remaining investment in partnership (Local Partnership) using the equity
method because the Partnership is a limited partner in the Local Partnership. As
such,  the  Partnership  has no control over the  selection and  application  of
accounting  policies,  or  the  use of  estimates,  by  the  Local  Partnership.
Environmental and operational trends, events and uncertainties that might affect
the  property  owned by the  Local  Partnership  would  not  necessarily  have a
significant  impact on the  Partnership's  application  of the equity  method of
accounting.

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

     In September  2006, the Financial  Accounts  Standards  Board (FASB) issued
SFAS No. 157, Fair Value Measurements ("SFAS No. 157"). SFAS No. 157 establishes
a formal framework for measuring fair value under generally accepted  accounting
principles.  Although SFAS No. 157 applies  (amends) the  provisions of existing
FASB  and  AICPA  pronouncements,  it  does  not  require  any  new  fair  value
measurements,  nor  does it  establish  valuation  standards.  SFAS  No.  157 is
effective for fiscal years  beginning  after  November 15, 2007.  Management has
determined that SFAS No. 157 will have no material impact to the Partnership.

                                     General
                                     -------

     The  Partnership  has invested,  through Local  Partnerships,  primarily in
federal or state  government-assisted  apartment  complexes  intended to provide
housing  to  low  and  moderate  income  tenants.   In  conjunction   with  such
governmental  assistance,  which  includes  federal  and/or  state  financing at
below-market  interest  rates  and  rental  subsidies,   certain  of  the  Local
Partnerships agreed to regulatory  limitations on (i) cash  distributions,  (ii)
use  of the  properties,  and  (iii)  sale  or  refinancing.  These  limitations
typically were designed to remain in place for the life of the mortgage.

     The original  investment  objectives of the  Partnership  primarily were to
deliver  tax  benefits,  as  well  as  cash  proceeds  upon  disposition  of the
properties,   through  the  Partnership's   investment  in  Local  Partnerships.
Regulatory  restrictions on cash  distributions  from the properties limited the
original projections of annual cash distributions from property operations.

     The original investment objectives of the Partnership have been affected by
the Tax Reform Act of 1986,  which  virtually  eliminated many of the incentives
for the new  construction or the sale of existing low income housing  properties
by limiting the use of passive loss  deductions.  Therefore,  C.R.I.,  Inc. (the
Managing General Partner)  concentrated on transferring the source of investment
yield from tax  benefits to cash flow  wherever  possible,  thereby  potentially
enhancing the ability of the  Partnership to share in the  appreciated  value of
the properties.

                                      II-2
<PAGE>
                                     PART II
                                     -------

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

     The Managing  General  Partner has  received  consent from the holders of a
majority of the units of limited  partner  interest for the  liquidation  of the
Partnership.  (See  Part  I,  Item  4.)  There  can  be no  assurance  that  the
Liquidation  will  be  completed   pursuant  to  the  Plan  of  Liquidation  and
Dissolution.  The following paragraphs discuss the operations of the Partnership
and the property in which it is invested during this period of liquidation.

     The  Managing  General  Partner has sold  certain  properties  by utilizing
opportunities  presented by federal  affordable housing  legislation,  favorable
financing  terms  and  preservation  incentives  available  to  tax  credit  and
not-for-profit  purchasers.  The remaining  rental  property  owned by the Local
Partnership  is financed by a state housing  agency.  Programs  developed by the
agency may include  opportunities  to sell a property to a qualifying  purchaser
who would agree to maintain the property as low to moderate income housing.  The
Managing  General  Partner  continues to monitor  certain state  housing  agency
programs,  and/or programs provided by certain lenders, to ascertain whether the
property  would  qualify  within the  parameters  of a given program and whether
these  programs  would provide an  appropriate  economic  benefit to the Limited
Partners of the Partnership.  However, it appears unlikely that a sale under any
of the agency's  current  programs would produce  sufficient cash to pay off the
Partnership's  purchase  money  note  secured  by  its  interest  in  the  Local
Partnership.  Moreover, the Managing General Partner has been unable to locate a
number of the holders of the note to obtain  their  consent to sell the property
for a lesser amount.  It is exploring  judicial  means of obtaining  declaratory
relief to proceed with disposition of the property.

     The Managing  General  Partner  continues to seek  strategies  to deal with
affordable  housing  requirements.  While the Managing  General  Partner  cannot
predict the  outcome for any  particular  property  at this time,  the  Managing
General  Partner  will  continue to work with the Local  Partnership  to develop
strategies that maximize the benefits to investors.

                          Financial Condition/Liquidity
                          -----------------------------

     As of December 31, 2007, the Partnership had approximately  2,969 investors
who held a total of 49,910 units of additional  limited  partner  interest which
were  originally sold for the aggregate  amount of $49,910,000.  The Partnership
originally made  investments in 22 Local  Partnerships,  of which one remains at
December 31, 2007. The Partnership's liquidity, with unrestricted cash resources
of  $4,588,111  as of December 31, 2007,  is expected to be adequate to meet its
current and anticipated  operating cash needs. As of March 31, 2008,  there were
no material commitments for capital expenditures.

     During 2007 and 2006, the Partnership received cash distributions of $0 and
$37,636, respectively, from the Local Partnerships.

     The  Partnership's  remaining  obligation with respect to its investment in
Westgate Tower Limited Dividend Housing Associates (Westgate),  in the form of a
nonrecourse purchase money note which matured September 1, 2003, has a principal
balance of  $1,400,000  plus accrued  interest of  $3,130,262 as of December 31,
2007,  and is payable in full upon the earliest of: (i) sale or  refinancing  of
the respective Local Partnership's rental property;  (ii) payment in full of the
respective Local Partnership's permanent loan; or (iii) maturity.

                                      II-3

<PAGE>
                                     PART II
                                     -------

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

     The  purchase  money note,  which is  nonrecourse  to the  Partnership,  is
secured by the Partnership's  interest in the Westgate Local Partnership,  which
owns Westgate Tower Apartments. The underlying property does not have sufficient
appreciation  and equity to enable the  Partnership  to pay the  purchase  money
note's principal and accrued interest.  In conjunction with the approved Plan of
Liquidation and Dissolution of the Partnership,  the Managing General Partner is
currently holding the property owned by Westgate for sale and seeking consent of
the noteholders to accept the proceeds from such sale as a discounted  payoff of
the purchase money note's principal and accrued  interest.  The Managing General
Partner  has been unable to locate a number of the holders of the note to obtain
their consent to sell the property for a lesser amount. It is exploring judicial
means of  obtaining  declaratory  relief  to  proceed  with  disposition  of the
property.  The discounted  payoff would result in  cancellation  of indebtedness
income to the Limited Partners, which would be taxed at a federal tax rate of up
to 35 percent.  There can be no assurance that a sale of Westgate and discounted
payoff of the purchase money note will occur.

     The Managing  General Partner has received  consent from a majority of Unit
Holders  for the  liquidation  of the  Partnership.  (See Part I, Item 4.) It is
anticipated that the Partnership's obligation, discussed above, would be retired
in  conjunction  with  such  Liquidation.  There  can be no  assurance  that the
Liquidation  will  be  completed   pursuant  to  the  Plan  of  Liquidation  and
Dissolution.

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the year ended  December 31, 2007,  existing cash resources were adequate to
support  net cash  used in  operating  activities.  Cash  and  cash  equivalents
decreased  $257,746  during  2007,  primarily  due to net cash used in operating
activities.  The Partnership does not expect to receive  distributions  from the
remaining Local Partnership in future years.

     On April 4, 2006,  the  Partnership  made a tax  distribution  of  $252,862
(approximately $7.20 per Unit) on behalf of Additional Limited Partners who were
not residents of Ohio.

                              Results of Operations
                              ---------------------

2007 Versus 2006
----------------

     The Partnership's net loss for the year ended December 31, 2007,  decreased
compared to 2006, primarily due to lower share of loss from partnerships,  lower
general and  administrative  expenses  and lower  professional  fees,  partially
offset by decreases in other income and gain on  disposition  of  investment  in
partnerships.  Share of loss from  partnerships  decreased  primarily due to the
cessation of loss from one property which was sold in 2007 and increased  rental
income at one property. Other income decreased due to the cessation of cash flow
from  properties  transferred  in  2006.  General  and  administrative  expenses
decreased  primarily due to lower reimbursed  payroll costs.  Professional  fees
decreased due to lower legal cost, partially offset by higher audit costs.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnerships. As a
result, the Partnership's  share of income from partnerships for the years ended
December  31,  2007  and  2006,  did  not  include  losses  of $0 and  $147,675,
respectively.  Distributions of $0 and $37,636, received from zero and two Local
Partnerships during 2007 and 2006, respectively, and for which the Partnership's
carrying value is zero (equity method suspended),  were recorded as increases in
the Partnership's share of income from partnerships in the year received.

                                    Inflation
                                    ---------

     Inflation  allows for increases in rental  rates,  usually  offsetting  any
higher operating and replacement costs.  Furthermore,  inflation  generally does
not impact the fixed rate long-term financing under which the Partnership's real
property investments were purchased.

                                      II-4

<PAGE>
                                     PART II
                                     -------

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

     The rental revenues of the  Partnership's  remaining  property for the five
years ended December 31, 2007, follow. Rental revenue amounts have been adjusted
to reflect property and interests sales and interests transferred in 2007 and in
prior years.

<TABLE>
<CAPTION>

                                                       For the years ended December 31,
                           ------------------------------------------------------------------------------------------------
                             2007                  2006                  2005                  2004                  2003
                           --------              --------              --------              --------              --------
                           <S>           <C>     <C>          <C>      <C>          <C>      <C>         <C>       <C>
Rental Revenue             $701,989              $680,348              $665,740              $652,980              $596,876

Annual Percentage
  Increase (decrease)                    3.2%                 2.2%                  2.0%                 9.4%

</TABLE>


ITEM 7. FINANCIAL STATEMENTS
        --------------------

     The information required by this item is contained in Part III.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
        ---------------------------------------------
          ON ACCOUNTING AND FINANCIAL DISCLOSURE
          --------------------------------------

     None.


ITEM 8A. CONTROLS AND PROCEDURES
         -----------------------

     In January 2008,  representatives  of the Managing  General  Partner of the
Partnership  carried out an  evaluation of the  effectiveness  of the design and
operation of the Partnership's  disclosure controls and procedures,  pursuant to
Exchange Act Rules  13a-15 and 15d-15.  The  Managing  General  Partner does not
expect that the  Partnership's  disclosure  controls and procedures will prevent
all error and all fraud.  A control  system,  no matter how well  conceived  and
operated,  can provide only  reasonable  assurance  that the  objectives  of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur  because  of simple  error or  mistake.  The  design of any  system of
controls also is based in part upon certain  assumptions about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all  potential  future  conditions.  Over time,
controls may become inadequate  because of changes in conditions,  or the degree
of compliance  with the policies or procedures may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may  occur and not be  detected.  Based on such  evaluation,  our
principal  executive officer and principal financial officer have concluded that
as of December 31, 2007, our disclosure  controls and procedures  were effective
to ensure that (i) the information required to be disclosed by us in the reports
filed or submitted by us under the Securities  Exchange Act of 1934, as amended,
was  recorded,  processed,  summarized  or  reported  within  the  time  periods
specified in the SEC's rules and forms and (ii) such information was accumulated
and communicated to management,  including our principal  executive  officer and
principal  financial  officer,  to allow  timely  decisions  regarding  required
disclosure.  In  addition,  there  have  been  no  significant  changes  in  the
Partnership's internal control over financial reporting that occurred during the
Partnership's  most recent fiscal  quarter that has materially  affected,  or is
reasonably likely to materially affect, the Partnership's  internal control over
financial reporting.

                                      II-5
<PAGE>
                                     PART II
                                     -------

ITEM 8B. OTHER INFORMATION
         -----------------

     There has not been any information  required to be disclosed in a report on
Form 8-K during the quarter ended December 31, 2007,  but not reported,  whether
or not otherwise required by this Form 10-KSB at December 31, 2007.

                                      II-6

<PAGE>
                                    PART III
                                    --------

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
        --------------------------------------------------

     (a) and (b)

          The  Partnership has no directors,  executive  officers or significant
          employees of its own.

     (a)  and (b)

          The names, ages and business experience of the directors and executive
          officers of C.R.I.,  Inc. (CRI),  the Managing  General Partner of the
          Partnership, follow.

William B. Dockser, 71, has been the Chairman of the Board and a Director of CRI
since 1974.  Prior to forming  CRI, he served as  President of Kaufman and Broad
Asset Management,  Inc., an affiliate of Kaufman and Broad,  Inc., which managed
publicly held limited  partnerships created to invest in low and moderate income
multifamily apartment properties.  Prior to joining Kaufman and Broad, he served
in various positions at HUD,  culminating in the post of Deputy FHA Commissioner
and Deputy Assistant Secretary for Housing Production and Mortgage Credit, where
he was responsible for all federally insured housing production programs. Before
coming to the Washington,  D.C., area, Mr. Dockser was a practicing  attorney in
Boston and served as a special  Assistant  Attorney General for the Commonwealth
of  Massachusetts.  He holds a Bachelor of Laws degree from Yale  University Law
School and a Bachelor of Arts degree, cum laude, from Harvard University.

H. William Willoughby,  61, has been President,  Secretary and a Director of CRI
since January 1990,  and was Senior  Executive Vice  President,  Secretary and a
Director of CRI from 1974 to 1989.  Effective May 7, 2005, he assumed the duties
of Principal  Financial Officer and Principal  Accounting  Officer of CRI. He is
principally  responsible for the financial  management of CRI and its associated
partnerships.  Prior to joining CRI in 1974,  he was Vice  President  of Shelter
Corporation of America and a number of its subsidiaries dealing principally with
real  estate   development   and  equity   financing.   Before  joining  Shelter
Corporation,  he was a senior tax accountant with Arthur Andersen & Co. He holds
a Juris Doctor degree, a Master of Business Administration degree and a Bachelor
of  Science  degree in  Business  Administration  from the  University  of South
Dakota.

     (c)  There is no family relationship between any of the foregoing directors
          and executive officers.

     (d)  Involvement in certain legal proceedings.

          None.



                                     III-1

<PAGE>
                                    PART III
                                    --------

ITEM 10. EXECUTIVE COMPENSATION
         ----------------------

     (a), (b), (c), (d), (e), (f), (g), and (h)

          The Partnership has no officers or directors.  However,  in accordance
          with  the  Partnership  Agreement,  and as  disclosed  in  the  public
          offering,  various  kinds of  compensation  and fees  were paid or are
          payable  to the  General  Partners  and their  affiliates.  Additional
          information  required  by  this  Item  10 is  incorporated  herein  by
          reference  to  Notes  3 and 4 of the  notes  to  financial  statements
          contained in Part III.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         -----------------------------------------------
           AND MANAGEMENT
           --------------

     (a)  Security ownership of certain beneficial owners.

          The following  table sets forth  certain  information  concerning  any
          person  (including any "group") who is known by the  Partnership to be
          the  beneficial  owner of more than five  percent  of the  issued  and
          outstanding units of additional  limited partner interest (Units),  at
          March 31, 2008.

<TABLE>
<CAPTION>
                                                                         % of Total
               Name and Address               Amount and Nature         Units Issued
               of Beneficial Owner         of Beneficial Ownership     and Outstanding
           -------------------------       -----------------------     ---------------
           <S>                             <C>                         <C>
           Equity Resource,                      10,421 Units               20.9%
             Investments, LLC
           1280 Massachusetts Avenue
           4th Floor
           Cambridge, MA 02138
</TABLE>

     (b)  Security ownership of management.

          The following  table sets forth  certain  information  concerning  all
          Units  beneficially  owned, as of March 31, 2008, by each director and
          by all  directors  and  officers  as a group of the  Managing  General
          Partner of the Partnership.

<TABLE>
<CAPTION>
                                                                          % of Total
                   Name of                    Amount and Nature          Units Issued
               Beneficial Owner            of Beneficial Ownership      and Outstanding
          --------------------------       -----------------------      ---------------
          <S>                              <C>                          <C>
          William B. Dockser                        None                     0.0%
          H. William Willoughby                     None                     0.0%
          All Directors and Officers
            as a Group (2 persons)                  None                     0.0%
</TABLE>

     (c)  Changes in control.

          There exists no arrangement known to the Partnership, the operation of
          which may, at a subsequent date,  result in a change in control of the
          Partnership. There is a provision in the Limited Partnership Agreement
          which  allows,  under  certain  circumstances,  the  ability to change
          control.

                                     III-2
<PAGE>
                                    PART III
                                    --------


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------

     (a) and (b)

          Transactions with management and others.

          The  Partnership  has no  directors  or  officers.  In  addition,  the
          Partnership  has  had no  transactions  with  individual  officers  or
          directors of the Managing  General  Partner of the  Partnership  other
          than any indirect interest such officers and directors may have in the
          amounts  paid to the Managing  General  Partner or its  affiliates  by
          virtue of their stock ownership in CRI. Item 10 of this report,  which
          contains  a  discussion  of the fees and  other  compensation  paid or
          accrued  by  the   Partnership  to  the  General   Partners  or  their
          affiliates,  is incorporated herein by reference.  Note 3 of the notes
          to  financial   statements  contained  in  Part  III,  which  contains
          disclosure of related party transactions,  is also incorporated herein
          by reference.

     (c)  Certain business relationships.

          The  Partnership's  response to Item 12(a) is  incorporated  herein by
          reference.  In addition,  the Partnership has no business relationship
          with  entities of which the  officers  and  directors  of the Managing
          General Partner of the  Partnership are officers,  directors or equity
          owners other than as set forth in the  Partnership's  response to Item
          12(a).

     (d)  Transactions with promoters.

          Not applicable.


ITEM 13. EXHIBITS
         --------

          Index of  Exhibits  (Listed  according  to the number  assigned in the
          table in Item 601 of Regulation S-B.)

          Exhibit  No.  2 - Plan of  acquisition,  reorganization,  arrangement,
          liquidation, or succession.

          a.   Definitive  Proxy   Statement.   (Incorporated  by  reference  to
               Registrant's Definitive Proxy Statement dated February 4, 2004.)

          Exhibit No. 3 - Articles of Incorporation and bylaws.

          a.   Certificate of Limited Partnership of Capital Realty Investors-II
               Limited Partnership.  (Incorporated by reference to Exhibit No. 4
               to Registrant's  Registration Statement on Form S-11, as amended,
               dated April 28, 1983.)

          Exhibit No. 4 - Instruments  defining the rights of security  holders,
          including indentures.

          a.   Limited  Partnership  Agreement  of Capital  Realty  Investors-II
               Limited Partnership.  (Incorporated by reference to Exhibit No. 4
               to Registrant's  Registration Statement on Form S-11, as amended,
               dated April 28, 1983.)


                                     III-3

<PAGE>
                                    PART III
                                    --------

ITEM 13. EXHIBITS - Continued
         --------

          Exhibit No. 10 - Material Contracts.

          a.   Management  Services  Agreement  between CRI and  Capital  Realty
               Investors-II Limited  Partnership.  (Incorporated by reference to
               Exhibit No. 10(b) to Registrant's  Registration Statement on Form
               S-11, as amended, dated April 28, 1983.)

          Exhibit No.  31.1 -  Certification  of  Principal  Executive  Officer,
                               pursuant  to 18 U.S.C.  Section  1350,  as
                               adopted  pursuant  to Section 302 of the
                               Sarbanes-Oxley Act of 2002.

          Exhibit No.  31.2 -  Certification  of  Principal  Financial  Officer,
                               pursuant  to 18 U.S.C.  Section  1350,  as
                               adopted  pursuant  to Section 302 of the
                               Sarbanes-Oxley Act of 2002.

          Exhibit No. 32 -     Certification  of  Principal  Executive  Officer
                               and Principal Financial Officer,  pursuant to
                               18 U.S.C. Section 1350, as adopted pursuant to
                               Section 906 of the  Sarbanes-Oxley  Act of 2002.

          Exhibit No. 99 - Additional Exhibits.

          a.   Prospectus of the Partnership,  dated May 6, 1983.  (Incorporated
               by reference to Registrant's Registration Statement on Form S-11,
               as amended, dated April 28, 1983.)


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
         --------------------------------------

     During the years ended December 31, 2007 and 2006, the Partnership retained
Grant Thornton LLP to provide services as follows.


                                      Year Ended December 31,
                                    ----------------------------
                                      2007                2006
                                    --------            --------

         Audit fees                 $107,500            $101,444
         Audit-related fees               --                  --
         Tax fees (1)                 29,020              26,250
         All other fees                   --                  --
                                          --                  --
                                    --------            --------
             Total                  $136,520            $127,694
                                    ========            ========


         (1) Preparation of Partnership federal and state tax returns.


     The Partnership has no directors or officers. The Board of Directors of the
Managing General Partner of the Partnership, serving as the audit committee, has
approved in advance  100% of the fees paid to, and  services  provided by, Grant
Thornton LLP. Prior to approving  Grant  Thornton LLP's  providing any non-audit
services,  the  Board  of  Directors  of the  Managing  General  Partner  of the
Partnership   would  assess  whether  the  provision  of  those  services  would
compromise  Grant  Thornton  LLP's  independence.  Grant  Thornton  LLP provided
partnership tax return preparation  services during the years ended December 31,
2007 and  2006,  which  services  it was  determined  did not  compromise  Grant
Thornton LLP's independence.


                                     III-4

<PAGE>
                                   SIGNATURES
                                   ----------

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                             CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP
                             -----------------------------------------------
                             (Registrant)

                             by:  C.R.I., Inc.
                                  ------------------------------------------
                                  Managing General Partner



March 31, 2008                    by:  /s/ William B. Dockser
--------------                         -------------------------------------
DATE                                   William B. Dockser,
                                       Director, Chairman of the Board,
                                         and Treasurer
                                        (Principal Executive Officer)


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


March 31, 2008                    by:  /s/ H. William Willoughby
--------------                         -------------------------------------
DATE                                   H. William Willoughby,
                                       Director, President, Secretary,
                                         Principal Financial Officer and
                                         Principal Account Officer


                                     III-5
<PAGE>



        Management's Report on Internal Control Over Financial Reporting


     Internal  control over financial  reporting  refers to the process designed
by, or under the supervision of, our Chief Executive Officer and Chief Financial
Officer, and effected by our Board of Directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial  statements for external purposes in accordance
with U.S. generally accepted accounting principles,  and includes those policies
and procedures that:

     (1)  Pertain  to the  maintenance  of  records  that in  reasonable  detail
accurately and fairly reflect the transactions and dispositions of the assets of
the Partnership.

     (2)  Provide  reasonable   assurance  that  transactions  are  recorded  as
necessary to permit preparation of financial  statements in accordance with U.S.
generally accepted accounting principles,  and that receipts and expenditures of
the  Partnership  are  being  made only in  accordance  with  authorizations  of
management and directors of the Partnership; and

     (3) Provide reasonable  assurance regarding  prevention or timely detection
of unauthorized acquisition, use of disposition of the Partnership's assets that
could have a material effect on the financial statements.

     Internal control over financial reporting cannot provide absolute assurance
of achieving financial reporting objectives because of its inherent limitations.
Internal  control over  financial  reporting is a process  that  involves  human
diligence and  compliance  and is subject to lapses in judgement and  breakdowns
resulting from human failures.  Internal  control over financial  reporting also
can be circumvented  by collusion or improper  management  override.  Because of
such  limitations,  there  is a risk  that  material  misstatements  may  not be
prevented  or detected  on a timely  basis by internal  control  over  financial
reporting.  However,  these  inherent  limitations  are  known  features  of the
financial  reporting  process.  Therefore,  it is  possible  to design  into the
process  safeguards to reduce,  though not eliminate,  this risk.  Management is
responsible for  establishing  and maintaining  adequate  internal  control over
financial reporting for the Partnership.

     Management  has  used  the  framework  set  forth  in the  report  entitled
"Internal  Control  --  Integrated  Framework"  published  by the  Committee  of
Sponsoring   Organizations   of  the   Treadway   Commission   to  evaluate  the
effectiveness of the  Partnership's  internal control over financial  reporting.
Management has concluded that the Partnership's  internal control over financial
reporting was effective as of December 31, 2007.

     This  annual  report  does  not  include  an  attestation   report  of  the
Partnership's  registered public accounting firm regarding internal control over
financial  reporting.  Management's report was not subject to attestation by the
Partnership's  registered  public accounting firm pursuant to temporary rules of
the Securities and Exchange  Commission  that permit the  Partnership to provide
only management's report in this annual report.

                                     III-6
<PAGE>

Report of Independent Registered Public Accounting Firm


The Partners
Capital Realty Investors-II Limited Partnership.


We have audited the accompanying  balance sheets of Capital Realty  Investors-II
Limited  Partnership (a Maryland limited  partnership)  (the  Partnership) as of
December 31, 2007 and 2006 and the related statements of operations,  changes in
partners'  (deficit)  capital,  and cash flows for the years then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with the Standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial statements are free from material misstatement. The Partnership is not
required  to have,  nor were we  engaged  to  perform  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion  on  the  effectiveness  of  the  Partnership's  internal  control  over
financial  reporting.  Accordingly,  we express no such  opinion.  An audit also
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  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 provide a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Capital Realty  Investors-II
Limited  Partnership  as of December  31, 2007 and 2006,  and the results of its
operations,  changes in partners'  (deficit)  capital and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.

As described in Note A to the financial statements, the Partnership has received
limited  partner  approval  of  the  Partnership's  plan  to  sell  all  of  the
Partnership's  assets  and  dissolve  the  Partnership  pursuant  to a  Plan  of
Liquidation and Dissolution. There can be no assurance that the Liquidation will
be completed pursuant to the Plan of Liquidation and Dissolution.


/s/ Grant Thornton LLP


McLean, Virginia
March 31, 2008


                                     III-7

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                    December 31,
                                                            ----------------------------
                                                                2007            2006
                                                            ------------    ------------
<S>                                                         <C>             <C>
Investment in partnerships held for sale ................   $    392,458    $    392,643
Cash and cash equivalents ...............................      4,588,111       4,845,857
Other assets ............................................         31,741         117,806
                                                            ------------    ------------

   Total assets .........................................   $  5,012,310    $  5,356,306
                                                            ============    ============




                        LIABILITIES AND PARTNERS' CAPITAL



Due on investments in partnerships ......................   $  1,400,000    $  1,400,000
Accrued interest payable ................................      3,130,262       3,004,262
Accounts payable and accrued expenses ...................        149,718         147,849
                                                            ------------    ------------

   Total liabilities ....................................      4,679,980       4,552,111
                                                            ------------    ------------

Commitments and contingencies

Partners' capital:

  Capital paid in:
    General Partners ....................................          2,000           2,000
    Limited Partners ....................................     50,015,000      50,015,000
                                                            ------------    ------------

                                                              50,017,000      50,017,000

  Less:
    Accumulated distributions to partners ...............    (34,752,903)    (34,752,903)
    Offering costs ......................................     (5,278,980)     (5,278,980)
    Accumulated losses ..................................     (9,652,787)     (9,180,922)
                                                            ------------    ------------

      Total partners' capital ...........................        332,330         804,195
                                                            ------------    ------------

      Total liabilities and partners' capital ...........   $  5,012,310    $  5,356,306
                                                            ============    ============
</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-8

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                             For the years ended
                                                                                 December 31,
                                                                       ------------------------------
                                                                           2007               2006
                                                                       -----------        -----------
<S>                                                                    <C>                <C>
Share of loss from partnerships                                        $      (185)       $  (118,017)
                                                                       -----------        -----------
Other revenue and expenses:

  Revenue:
    Interest and other                                                     249,851            270,649
                                                                       -----------        -----------

                                                                           249,851            270,649
                                                                       -----------        -----------
  Expenses:
    Management fee                                                         249,996            249,996
    General and administrative                                             214,705            232,413
    Professional fees                                                      143,306            166,330
    Interest                                                               126,000            126,000
                                                                       -----------        -----------
                                                                           734,007            774,739
                                                                       -----------        -----------
      Total other revenue and expenses                                    (484,156)          (504,090)
                                                                       -----------        -----------

Loss before gain on disposition of investment in partnerships             (484,341)          (622,107)

Gain on disposition of investment in partnerships                           12,476             90,932
                                                                       -----------        -----------
Net loss                                                               $  (471,865)       $  (531,175)
                                                                       ===========        ===========

Net loss allocated to General Partners (1.51%)                         $    (7,125)       $    (8,021)
                                                                       ===========        ===========

Net loss allocated to Initial and Special Limited Partners (1.49%)     $    (7,031)       $    (7,914)
                                                                       ===========        ===========

Net loss allocated to Additional Limited Partners (97%)                $  (457,709)       $  (515,240)
                                                                       ===========        ===========

Net loss per unit of Additional Limited Partner Interest,
  based on 49,910 units outstanding                                    $     (9.17)       $    (10.32)
                                                                       ===========        ===========

</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-9




<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

              STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL


<TABLE>
<CAPTION>

                                                                      Initial and
                                                                        Special         Additional
                                                       General          Limited          Limited
                                                      Partners          Partners         Partners             Total
                                                     ----------       ------------       ----------        -----------
<S>                                                  <C>              <C>                <C>               <C>
Partners' (deficit) capital, January 1, 2006         $(310,037)       $(251,225)         $2,149,494         $1,588,232

  Net loss                                              (8,021)          (7,914)           (515,240)          (531,175)

  Tax distribution on behalf of
    Additional Limited Partners                             --               --            (252,862)          (252,862)
                                                     ---------        ---------          ----------        -----------

Partners' (deficit) capital, December 31, 2006        (318,058)        (259,139)          1,381,392            804,195
                                                     ---------        ---------          ----------        -----------

  Net loss                                              (7,125)          (7,031)           (457,709)          (471,865)
                                                     ---------        ---------          ----------        -----------

Partners' (deficit) capital, December 31, 2007       $(325,183)       $(266,170)         $  923,683        $   332,330
                                                     =========        =========          ==========        ===========

</TABLE>



                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-10

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  For the years ended
                                                                                       December 31,
                                                                                --------------------------
                                                                                    2007          2006
                                                                                -----------    -----------
<S>                                                                             <C>            <C>
Cash flows from operating activities:
  Net loss ..................................................................   $  (471,865)   $  (531,175)

  Adjustments to reconcile net loss to net cash used in operating activities:
    Share of loss from partnerships .........................................           185        118,017
    (Gain) loss on disposition of investment in partnerships ................       (12,476)        12,567
    Additional gain on disposition of investment in partnerships ............          --         (103,499)

    Changes in assets and liabilities:
      Decrease (increase) in other assets ...................................        86,065       (115,915)
      Increase in accrued interest payable ..................................       126,000        126,000
      Increase in accounts payable and accrued expenses .....................         1,869          7,426
      Increase in accrued interest receivable on advances ...................          --           (1,250)
                                                                                -----------    -----------

        Net cash used in operating activities ...............................      (270,222)      (487,829)
                                                                                -----------    -----------


Cash flows from investing activities:
  Proceeds from disposition of investment in partnerships receivable ........        12,476           --
  Collection of sale proceeds receivable ....................................          --          797,693
  Additional proceeds from disposition of investment in partnerships ........          --          103,499
  Receipt of distributions from partnerships ................................          --           37,636
                                                                                -----------    -----------

        Net cash provided by investing activities ...........................        12,476        938,828
                                                                                -----------    -----------


Cash flows from financing activities:
  Tax distribution on behalf of Additional Limited Partners .................          --         (252,862)
                                                                                -----------    -----------

        Net cash used in financing activities ...............................          --         (252,862)
                                                                                -----------    -----------


Net (decrease) increase in cash and cash equivalents ........................      (257,746)       198,137

Cash and cash equivalents, beginning of year ................................     4,845,857      4,647,720
                                                                                -----------    -----------

Cash and cash equivalents, end of year ......................................   $ 4,588,111    $ 4,845,857
                                                                                ===========    ===========

</TABLE>



                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-11
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a.   Organization
          ------------

          Capital Realty Investors-II  Limited Partnership (the Partnership) was
     formed under the Maryland Revised Uniform Limited  Partnership Act on March
     23,  1983,  and shall  continue  until  December 31,  2037,  unless  sooner
     dissolved in accordance with the terms of the Partnership  Agreement.  (See
     Note 1.k., below, for a discussion on the Partnership's Plan of Liquidation
     and  Dissolution.)  The  Partnership was formed to invest in real estate by
     acquiring and holding  limited  partner  interests in limited  partnerships
     (Local    Partnerships)   that   own   and   operate   federal   or   state
     government-assisted  apartment properties which provide housing principally
     to the elderly or to  individuals  and families of low or moderate  income,
     located throughout the United States.

          The General Partners of the Partnership are C.R.I.,  Inc. (CRI), which
     is the Managing  General  Partner,  and current and former  shareholders of
     CRI. The Initial  Limited  Partner is  Rockville  Pike  Associates  Limited
     Partnership-II,  a  limited  partnership  which  includes  certain  current
     officers and former employees of CRI or its affiliates. The Special Limited
     Partner  had  been  Two  Broadway  Associates  II,  a  limited  partnership
     comprised of an affiliate and employees of Merrill Lynch, Pierce,  Fenner &
     Smith, Incorporated.  Effective January 1, 2002, Two Broadway Associates II
     transferred its interest to MLH Merger Corporation and three individuals.

          The  Partnership  sold 50,000  units at $1,000 per unit of  additional
     limited partner interest through a public offering. The offering period was
     terminated  on June  20,  1983.  As of  December  31,  2007,  85  units  of
     additional limited partner interest had been abandoned.

     b.   Method of accounting
          --------------------

          The  financial  statements  of the  Partnership  are  prepared  on the
     accrual  basis of  accounting  in  conformity  with  accounting  principles
     generally accepted in the United States of America.

     c.   Investments in and advances to partnerships
          -------------------------------------------

          The investments in and advances to Local Partnerships (see Note 2) are
     accounted for by the equity  method  because the  Partnership  is a limited
     partner in the Local  Partnerships.  Under this method, the carrying amount
     of the investments in and advances to Local  Partnerships is (i) reduced by
     distributions  received and (ii) increased or reduced by the  Partnership's
     share of earnings or losses, respectively, of the Local Partnerships. As of
     December 31, 2007 and 2006, the Partnership's share of cumulative losses of
     zero  and  two  of  the  Local  Partnerships  exceeded  the  amount  of the
     Partnership's investments in and advances to those Local Partnerships by $0
     and  $1,008,958,   respectively.  Since  the  Partnership  has  no  further
     obligation   to  advance   funds  or  provide   financing  to  these  Local
     Partnerships, the excess losses have not been reflected in the accompanying
     financial statements.  Distributions of $0 and $37,636,  received from zero
     and two Local  Partnerships  during  2007 and 2006,  respectively,  and for
     which the Partnership's  carrying value is zero (equity method  suspended),
     were  recorded  as  increases  in the  Partnership's  share of income  from
     partnerships in the year received.


                                     III-12
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

          Costs incurred in connection  with acquiring  these  investments  have
     been  capitalized and are being amortized  using the  straight-line  method
     over the  estimated  useful  lives  of the  properties  owned by the  Local
     Partnerships.

     d.   Investment in partnerships held for sale
          ----------------------------------------

          Chowchilla   Elderly   Associates,   Ltd.   (Golden  Acres)  had  been
     reclassified   to  investment  in   partnerships   held  for  sale  in  the
     accompanying balance sheet at December 31, 2006. The Partnership's interest
     in  Golden  Acres  was sold in  December  2007.  Orangewood  Plaza  Limited
     Partnership  (Orangewood  Plaza) had been  reclassified  to  investment  in
     partnerships  held for sale in the accompanying  balance sheets at December
     31,  2006.  The  Partnership's  interest  in  Orangewood  Plaza was sold in
     December  2007.  Due to the  possible  sale of the Westgate  Tower  Limited
     Dividend  Housing  Associates   (Westgate)   property,   the  Partnership's
     investment in Westgate has been  reclassified to investment in partnerships
     held for sale in the  accompanying  balance sheets at December 31, 2007 and
     2006. When investments are reclassified to investment in partnerships  held
     for sale,  amortization of acquisition fees and property purchase costs are
     discontinued.  Assets  held for sale are not  recorded  in  excess of their
     estimated net realizable value.

     e.   Cash and cash equivalents
          -------------------------

          Cash and cash  equivalents  consist of money  market  funds,  time and
     demand  deposits,  and repurchase  agreements  with original  maturities of
     three months or less. Interest income is recognized as earned.

     f.   Income taxes
          ------------

          For federal and state income tax purposes, each partner reports on his
     or her  personal  income tax  return his or her share of the  Partnership's
     income or loss as determined  for tax purposes.  Accordingly,  no provision
     has been made for income taxes in these financial statements.

     g.   Use of estimates
          ----------------

          In  preparing  financial  statements  in  conformity  with  accounting
     principles  generally  accepted  in  the  United  States  of  America,  the
     Partnership is required to make estimates and  assumptions  that affect the
     reported amounts of assets and liabilities and the disclosure of contingent
     assets and  liabilities  at the date of the  financial  statements,  and of
     revenues and expenses  during the reporting  periods.  Actual results could
     differ from those estimates.

     h.   Fair value of financial instruments
          -----------------------------------

          The financial  statements  include estimated fair value information as
     of December  31,  2007 and 2006,  as required  by  Statement  of  Financial
     Accounting Standards No. 107 (SFAS No. 107), Disclosure About Fair Value of
     Financial   Instruments.   Such   information,   which   pertains   to  the
     Partnership's  financial  instruments  (primarily cash and cash equivalents
     and the purchase  money note),  is based on the  requirements  set forth in
     SFAS No. 107 and does not purport to represent the aggregate net fair value
     of the Partnership.

                                     III-13

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

          The  balance  sheet  carrying  amounts  for cash and cash  equivalents
     approximate estimated fair values of such assets.

          The  Partnership has determined that it is not practicable to estimate
     the fair value of the purchase money note due to: (i) the lack of an active
     market for this type of financial  instrument,  (ii) the variable nature of
     purchase money note interest  payments as a result of fluctuating cash flow
     distributions  received from the related Local  Partnership,  and (iii) the
     excessive costs  associated  with an independent  appraisal of the purchase
     money note.

     i.   Definitive Proxy Statement
          --------------------------

          On  February  4,  2004,  the  Partnership  filed  a  Definitive  Proxy
     Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934,
     and mailed it to limited  partners to solicit  consents for approval of the
     following:

     (1)  The sale of all of the Partnership's assets and the dissolution of the
          Partnership pursuant to a Plan of Liquidation and Dissolution, and the
          amendment of the Partnership's Limited Partnership Agreement to permit
          the Managing General Partner, CRI, to be eligible to receive increased
          property  disposition  fees from the  Partnership on the same basis as
          such fees may currently be paid to Local General Partners, real estate
          brokers  or  other  third  party   intermediaries   employed  to  sell
          Partnership  properties,  to the extent that CRI markets and sells the
          Partnership's  properties  instead  of such  persons  (a  "Disposition
          Fee");

     (2)  The amendment of the Partnership's  Limited  Partnership  Agreement to
          permit CRI to be eligible to receive a partnership  liquidation fee in
          the amount of $500,000,  payable only if the Managing  General Partner
          is  successful in  liquidating  all of the  Partnership's  investments
          within 36 months from the date the liquidation was approved [March 22,
          2004], in recognition  that one or more of the properties in which the
          Partnership  holds an  interest  might not be  saleable to parties not
          affiliated  with the respective  Local  Partnership  due to the amount
          and/or  terms  of  their  current   indebtedness   (the   "Partnership
          Liquidation Fee"); and

     (3)  To authorize the Managing General Partner, in its sole discretion,  to
          elect to extend the period during which  Consents of Limited  Partners
          may be  solicited  and voted,  but not beyond sixty (60) days from the
          date that the Consent  Solicitation  Statement was sent to the Limited
          Partners.

     The matters for which consent was solicited are collectively referred to as
     the "Liquidation."

          The record date for voting was December 31, 2003, and the final voting
     deadline was March 22, 2004. A tabulation  of votes  received by the voting
     deadline follows.

                                     III-14

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

<TABLE>
<CAPTION>
                                     FOR                  AGAINST                ABSTAIN                 TOTAL
                             ------------------     ------------------     -------------------    --------------------
                             Units of               Units of               Units of                Units of
                             limited                limited                limited                 limited
                             partner                partner                partner                 partner
Description                  interest   Percent     interest   Percent     interest    Percent     interest    Percent
-----------                  --------   -------     --------   -------     --------    -------     --------    -------
<S>                          <C>        <C>         <C>        <C>         <C>         <C>         <C>         <C>
Sale, dissolution and
 five percent
 Disposition Fee              28,699     57.6%       1,264       2.5%         268        0.5%       30,231      60.6%

$500,000 Partnership
 Liquidation Fee              25,841     51.8%       3,546       7.1%         844        1.7%       30,231      60.6%

Extension of
 solicitation period          27,975     56.1%       1,767       3.5%         489        1.0%       30,231      60.6%

</TABLE>

          The Partnership was not liquidated  within 36 months from the approved
     liquidation date of March 22, 2004,  therefore no liquidation fee was taken
     by the Managing General Partner. The Managing General Partner is continuing
     towards liquidation of all the Partnership's investments.

          There  can be no  assurance  that the  Liquidation  will be  completed
     pursuant to the Plan of Liquidation and Dissolution.

     j.   Allocation of net income (loss)
          -------------------------------

          Net  income  (loss)  is  allocated  based  on  respective  partnership
     interest or units outstanding. The Partnership has no dilutive interests.

     k.   New accounting pronouncement
          ----------------------------

          In September  2006,  the  Financial  Accounts  Standards  Board (FASB)
     issued SFAS No. 157, Fair Value Measurements ("SFAS No. 157"). SFAS No. 157
     establishes a formal  framework for  measuring  fair value under  generally
     accepted accounting principles.  Although SFAS No. 157 applies (amends) the
     provisions of existing FASB and AICPA  pronouncements,  it does not require
     any new fair value measurements, nor does it establish valuation standards.
     SFAS No. 157 is effective  for fiscal years  beginning  after  November 15,
     2007.  Management  has  determined  that SFAS No. 157 will have no material
     impact to the Partnership.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

     a.   Due on investment in partnerships and accrued interest payable
          --------------------------------------------------------------

          As of December 31, 2007 and 2006, the Partnership held limited partner
     interests  in one and three Local  Partnerships,  respectively,  which were
     organized to develop, construct, own, maintain and operate rental apartment
     properties.  The remaining amounts due on the  Partnership's  investment in
     one Local Partnership follow.

                                     III-15

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                                           December 31,
                                                   ---------------------------
                                                      2007             2006
                                                   ----------       ----------

           Purchase money note due in 2003         $1,400,000       $1,400,000

           Accrued interest payable                 3,130,262        3,004,262
                                                   ----------       ----------
                             Total                 $4,530,262       $4,404,262
                                                   ==========       ==========


          The remaining  purchase  money note,  which matured  September 1, 2003
     (see below),  has a stated  interest rate of 9%. The purchase money note is
     nonrecourse,  but its terms  provide for payment in full upon the  earliest
     of: (i) sale or refinancing  of the Local  Partnership's  rental  property;
     (ii) payment in full of the Local  Partnership's  permanent  loan; or (iii)
     maturity.

          The purchase  money note  outstanding  at December 31, 2007,  which is
     nonrecourse to the Partnership, is secured by the Partnership's interest in
     the  Westgate  Local  Partnership,  which owns  Westgate  Tower  Apartments
     (Westgate).  The underlying property does not have sufficient  appreciation
     and equity to enable  the  Partnership  to pay the  purchase  money  note's
     principal and accrued  interest.  In conjunction  with the approved Plan of
     Liquidation  and  Dissolution  of the  Partnership,  the  Managing  General
     Partner is currently  holding the  property  owned by Westgate for sale and
     seeking consent of the noteholders to accept the proceeds from such sale as
     a discounted  payoff of the purchase  money  note's  principal  and accrued
     interest.  The Managing  General Partner has been unable to locate a number
     of the holders of the note to obtain their consent to sell the property for
     a lesser amount.  It is exploring  judicial means of obtaining  declaratory
     relief to proceed with disposition of the property.  The discounted  payoff
     would  result  in  cancellation  of  indebtedness  income  to  the  Limited
     Partners,  which  would be taxed at a federal tax rate of up to 35 percent.
     There can be no assurance that a sale of Westgate and discounted  payoff of
     the purchase money note will occur.

          Interest expense on the Partnership's Westgate purchase money note for
     the years ended  December 31, 2007 and 2006,  was  $126,000  and  $126,000,
     respectively.  The accrued  interest  payable on the purchase money note of
     $3,130,262 and  $3,004,262 as of December 31, 2007 and 2006,  respectively,
     is in default.

                                    Westgate
                                    --------

          The  Partnership  defaulted on its one remaining  purchase money note,
     related to  Westgate,  on September  1, 2003,  when the note (as  extended)
     matured and was not paid. The default amount included principal and accrued
     interest of $1,400,000 and $2,584,492,  respectively. As of March 31, 2008,
     principal and accrued interest of $1,400,000 and $3,161,590,  respectively,
     were due.

          Due to the  possible  sale of the property  related to  Westgate,  the
     Partnership's   basis  in  the  Local  Partnership,   along  with  the  net
     unamortized  amount of acquisition fees and property purchase costs,  which
     totaled  $392,458  and  $392,643 as of December  31, 2007 and  December 31,
     2006,  respectively,  has been  reclassified  to investment in partnerships
     held for sale in the accompanying balance sheets.

                                     III-16

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     b.   Interests in profits,  losses and cash distributions made by the Local
          ----------------------------------------------------------------------
            Partnerships
            ------------

          The  Partnership  has a 97.99%  interest in  profits,  losses and cash
     distributions (as restricted by state housing agencies) (collectively,  the
     Agencies) in the remaining Local Partnership.  An affiliate of the Managing
     General  Partner of the  Partnership is also a general partner of the Local
     Partnership.   As  stipulated  by  the  Local   Partnership's   partnership
     agreement,   the  Local   Partnership  is  required  to  make  annual  cash
     distributions  from surplus cash flow,  if any.  During 2007 and 2006,  the
     Partnership received cash distributions from rental operations of the Local
     Partnerships of $0 and $37,636,  respectively. As of both December 31, 2007
     and 2006,  none of the Local  Partnerships  had aggregate  surplus cash, as
     defined by their respective regulatory Agencies.

          The cash  distributions  to the Partnership from the operations of the
     Local  Partnerships  may be  limited  by the  Agencies'  regulations.  Such
     regulations limit annual cash  distributions to a percentage of the owner's
     equity investment in a rental property.  Funds in excess of those which may
     be distributed to owners are generally  required to be placed in a residual
     receipts  account  held by the  governing  state or federal  agency for the
     benefit of the  property.  In addition,  local  general  partners  have the
     authority to withhold funds if needed for property  repairs,  improvements,
     or other property needs.

          Upon sale or refinancing  of a property owned by a Local  Partnership,
     or upon the  liquidation  of a Local  Partnership,  the proceeds  from such
     sale,  refinancing or liquidation  shall be distributed in accordance  with
     the  respective   provisions  of  each  Local   Partnership's   partnership
     agreement.  In  accordance  with such  provisions,  the  Partnership  would
     receive  from such  proceeds  its  respective  percentage  interest  of any
     remaining  proceeds,  after payment of (i) all debts and liabilities of the
     Local Partnership and certain other items,  (ii) the Partnership's  capital
     contributions   plus  certain   specified   amounts  as  outlined  in  each
     partnership  agreement,  and (iii) certain special distributions to general
     partners and related entities of the Local Partnership.

          Due to the amount payable with respect to the Westgate  purchase money
     note, it is unlikely that there will be any sales proceeds distributable to
     the Partnership when the Westgate property is sold.

     c.   Advance to Local Partnership
          ----------------------------

                                 Four Winds West
                                 ---------------

          On October 12, 2004, the  Partnership  advanced  $25,000 to Four Winds
     West to assist with current cash requirements.  As of October 31, 2006, the
     note was  canceled.  For  financial  reporting  purposes,  the  advance was
     reduced  to zero by the  Partnership  as a result of losses at the  related
     Local Partnership level in 2004.

     d.   Completed sales and transfer
          ----------------------------

                                   Chevy Chase
                                   -----------

          On November 22, 2005,  the  property  owned by Chevy Chase Park,  Ltd.
     (Chevy  Chase)  was  sold.  Gross  cash  proceeds  received  in 2005 by the
     Partnership  totaled   $6,814,125.   The  sale  resulted  in  net  gain  on
     disposition  of investment  in  partnerships  of  $5,238,173  for financial
     statement purposes and in total gain of $7,115,800 for federal tax purposes
     in 2005.  The  Partnership  accrued  $23,208,  which is included in gain on
     disposition of investment in  partnerships  in 2005,  for  additional  sale
     proceeds  receivable  related to the sale of which  $18,909 was received in
     March 2006 and the  remaining  $4,299 was received in April 2006.  In 2006,
     net gain on  disposition  of  investment  in  partnerships  was  reduced by
     $11,602 relating to additional  expenses  incurred.  In accordance with the
     terms of the Partnership  Agreement,  in November 2005 the Managing General
     Partner was paid a disposition fee of $435,000 related to the sale. The fee
     was netted  against  the  related  gain on  disposition  of  investment  in
     partnerships.

                                     III-17

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                 Four Winds West
                                 ---------------

          As of October 31, 2006, the Partnership's  interest in Four Winds West
     was transferred to an affiliate of the local managing general partner.  The
     transfer  resulted in loss on disposition of investment in  partnerships of
     $12,567 for financial  statement purposes and in total gain of $587,569 for
     federal  income  tax  purposes  in 2006.  In March  2007,  the  Partnership
     received a cash  distribution  of $12,305  which is accrued and included in
     other income in the accompanying financial statements at December 31, 2006.

                                  Golden Acres
                                  ------------

          On December 31, 2007, the  Partnership's  interest in Golden Acres was
     sold.   The  sale  resulted  in  gain  on   disposition  of  investment  in
     partnerships  of $2,476 for  financial  statement  purposes  and in gain of
     $922,645 for federal tax purposes. The Partnership's basis in Golden Acres,
     which totaled $0 at December 31, 2006,  was  reclassified  to investment in
     partnerships held for sale in the accompanying balance sheets at that date.

                                Orangewood Plaza
                                ----------------

          On December 31, 2007, the  Partnership's  interest in Orangewood Plaza
     was  sold.  The sale  resulted  in gain on  disposition  of  investment  in
     partnerships  of $10,000 for  financial  statement  purposes and in gain of
     $1,330,147 for federal tax purposes.  The Partnership's basis in Orangewood
     Plaza,  which  totaled  $0  at  December  31,  2006,  was  reclassified  to
     investment in partnerships held for sale in the accompanying balance sheets
     at that date.

                                 Posada Vallarta
                                 ---------------

          On December 12, 2005, the property owned by Posada Associates  Limited
     Partnership  (Posada  Vallarta) was sold.  Gross cash proceeds  received in
     2005 by the Partnership totaled  $3,930,457.  The sale resulted in net gain
     on  disposition of investment in  partnerships  of $3,111,832 for financial
     statement  purposes  and in  total  gain of  $13,057,662  for  federal  tax
     purposes  in  2005.  In  accordance  with  the  terms  of  the  Partnership
     Agreement,  in  December  2005  the  Managing  General  Partner  was paid a
     disposition  fee of  $1,118,625  related  to the sale.  The fee was  netted
     against the related gain on disposition of investment in partnerships.  The
     Partnership  accrued $300,000,  which is included in gain on disposition of
     investment in partnerships  in 2005, for additional sale proceeds  received
     in March 2006.  During the first quarter of 2006, the Partnership  recorded
     gain on disposition  of investment in  partnerships  of $113,617,  of which
     $54,035 was  received in March 2006 and $59,582 was received in April 2006.
     During the second  quarter of 2006,  gain on  disposition  of investment in
     partnerships  was  reduced  by  $3,861  relating  to  additional   expenses
     incurred.  During the third quarter of 2006, the Partnership  recorded gain
     in disposition of investment in partnerships of $5,819, of which $4,989 was
     received in July 2006 and $830 was received in September  2006.  During the
     fourth quarter of 2006,  gain on disposition of investment in  partnerships
     was reduced by $474.

                                     III-18

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                   Troy Manor
                                   ----------

          On December 31,  2006,  the  Partnership's  interest in Troy Manor was
     transferred  to an affiliate of the local  managing  general  partner.  The
     transfer resulted in no gain or loss for financial  statement  purposes and
     in total gain of $633,155  for  federal  income tax  purposes in 2006.  The
     Partnership's basis in Troy Manor totaled $0 at December 31, 2005. In March
     2007,  the  Partnership  received a cash  distribution  of $7,425  which is
     accrued  and  included  in  other  income  in  the  accompanying  financial
     statements at December 31, 2006.

     e.   Asset held for sale
          -------------------

                                    Westgate
                                    --------

          See Note 2.a., above.

     f.   Summarized financial information
          --------------------------------

          The balance sheet and statement of operations for the remaining  Local
     Partnership  in which the  Partnership is invested as of December 31, 2007,
     follow.  The information for the remaining Local Partnership has investment
     basis (equity method).

                                  BALANCE SHEET
                                December 31, 2007


                                                                 Equity
                                                                 Method
                                                               ----------
          Number of Local Partnerships                              1
                                                                    =

          Rental property, at cost, net of accumulated
            depreciation of $3,293,518                         $1,204,071
          Land                                                    153,473
          Other assets                                            363,975
                                                               ----------

              Total assets                                     $1,721,519
                                                               ==========


          Mortgage notes payable                               $1,176,655
          Other liabilities                                       196,357
                                                               ----------

              Total liabilities                                 1,373,012

          Partners' capital                                       348,507
                                                               ----------

              Total liabilities and partners' capital          $1,721,519
                                                               ==========

                                     III-19

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued



                             STATEMENT OF OPERATIONS
                      For the year ended December 31, 2007

                                                                 Equity
                                                                 Method
                                                               ----------
          Number of Local Partnerships                              1
                                                                    =

          Revenue:
            Rental                                             $  701,989
            Other                                                  28,381
                                                               ----------

              Total revenue                                       730,370
                                                               ----------

          Expenses:
            Operating                                             606,371
            Interest                                              (39,011)
            Depreciation and  amortization                        163,199
                                                               ----------

              Total expenses                                      730,559
                                                               ----------

          Net loss                                             $     (189)
                                                               ==========

          Cash distributions                                   $       --
                                                               ==========

          Partnership's share of
            Local Partnership net loss                               (185)
                                                               ----------

          Share of loss from partnership                       $     (185)
                                                               ==========


          Combined balance sheets and combined  statements of operations for the
     three  Local  Partnerships  in which the  Partnership  was  invested  as of
     December 31, 2006, follow. The information is presented  separately for one
     Local Partnership  which has investment basis (equity method),  and for two
     Local  Partnerships  for which  the  Partnership's  carrying  value is zero
     (equity method suspended).

                                     III-20

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued


                        COMBINED BALANCE SHEETS
                           December 31, 2006

<TABLE>
<CAPTION>
                                                    Equity
                                                    Method          Suspended         Total
                                                  ----------        ----------      -----------
     <S>                                          <C>               <C>             <C>
     Number of Local Partnerships                      1                2                3
                                                       =                =                =

     Rental property, at cost, net of
       accumulated depreciation of
       $3,130,319, $1,669,515, and
       $4,799,834, respectively                   $1,347,896        $ 1,442,412     $ 2,790,308
     Land                                            153,473            127,960         281,433
     Other assets                                    338,082            276,238         614,320
                                                  ----------        -----------      -----------

         Total assets                             $1,839,451        $ 1,846,610     $ 3,686,061
                                                  ==========        ===========    ===========


     Mortgage notes payable                       $1,298,371        $ 2,978,929     $ 4,277,300
     Other liabilities                               192,384            236,261         428,645
     Due to general partners                              --              1,385           1,385
                                                  ----------        -----------      -----------
         Total liabilities                         1,490,755          3,216,575       4,707,330

     Partners' capital (deficit)                     348,696         (1,369,965)     (1,021,269)
                                                  ----------        -----------      -----------
         Total liabilities
           and partners' deficit                  $1,839,451        $ 1,846,610     $ 3,686,061
                                                  ==========        ===========     ===========
</TABLE>


                   COMBINED STATEMENTS OF OPERATIONS
                 For the year ended December 31, 2006

<TABLE>
<CAPTION>
                                                    Equity
                                                    Method          Suspended          Total
                                                  ----------        ----------      -----------
     <S>                                          <C>               <C>             <C>
     Number of Local Partnerships                     1                2                 3
                                                      =                =                 =

     Revenue:
       Rental                                    $   680,348       $   427,734      $ 1,108,082
       Other                                          28,885           155,433          184,318
                                                 -----------       -----------      -----------

         Total revenue                               709,233           583,167        1,292,400
                                                 -----------       -----------      -----------

     Expenses:
       Operating                                     613,459           707,856        1,321,315
       Interest                                      (35,865)           40,987            5,122
       Depreciation and  amortization                162,735           108,703          271,438
                                                 -----------       -----------      -----------

         Total expenses                              740,329           857,546        1,597,875
                                                 -----------       -----------      -----------

     Net loss                                    $   (31,096)      $  (274,379)     $  (305,475)
                                                 ===========       ===========      ===========

     Cash distributions                          $        --       $    37,636 (1)  $    37,636
                                                 ===========       ===========      ===========

     Cash distributions recorded as income       $        --       $    37,636 (1)  $    37,636

     Partnership's share of
       Local Partnership net loss                    (30,471)         (123,933)        (154,404)

     Interest on advance                                  --            (1,249)          (1,249)
                                                 -----------       -----------      -----------

     Share of loss from partnerships             $   (30,471)      $   (87,546)     $  (118,017)
                                                 ===========       ===========      ===========
</TABLE>


     (1) Includes Troy Manor transferred in December 2006.

                                     III-21

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

          All of the cash distributions recorded as income are included in share
     of  income  from  partnerships  on the  statements  of  operations  for the
     respective  years,  and are  recorded as cash  receipts  on the  respective
     balance sheets.  Cash distributions  recorded as a reduction of the related
     investment are recorded as cash receipts on the respective  balance sheets,
     and  are  recorded  as a  reduction  of  investments  in  and  advances  to
     partnerships, also on the respective balance sheets.

     g.   Reconciliation of the Local Partnerships' financial statement net
          -----------------------------------------------------------------
            loss to taxable income
            ----------------------

          For federal income tax purposes,  the Local  Partnerships  report on a
     basis whereby: (i) certain revenue and the related assets are recorded when
     received rather than when earned; (ii) certain costs are expensed when paid
     or  incurred  rather  than  capitalized  and  amortized  over the period of
     benefit;  and (iii) a shorter life is used to compute  depreciation  on the
     property  as  permitted  by  the  Internal   Revenue  Code  and  underlying
     regulations.  These  returns are  subject to  examination  and,  therefore,
     possible adjustment by the IRS.

          A reconciliation of the Local  Partnerships'  financial  statement net
     loss reflected above to taxable loss follows.

                                                        For the years ended
                                                            December 31,
                                                     --------------------------
                                                        2007            2006
                                                     ----------      ----------

          Financial statement net loss               $     (189)     $ (305,475)

          Differences between financial statement
            and tax depreciation, amortization,
            and miscellaneous differences               214,453         161,464
                                                     ----------      ----------

          Taxable income (loss)                      $  214,264      $ (144,011)
                                                     ==========      ==========


3.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
paid the  Managing  General  Partner a fee for services in  connection  with the
review, selection,  evaluation,  negotiation and acquisition of the interests in
the Local  Partnerships.  The fee amounted to $1,000,000,  which is equal to two
percent  of  the  Additional  Limited  Partners'  capital  contributions  to the
Partnership.  The acquisition fee was capitalized and was being amortized over a
30-year period using the straight-line method. At December 31, 2004, each of the
Partnership's  investments in Local  Partnerships was reclassified to investment
in partnerships held for sale and amortization of this fee ceased.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection  with managing the  Partnership.  For the years ended December 31,
2007 and 2006, the Partnership paid $175,260 and $174,952,  respectively, to the
Managing General partner as direct  reimbursement of expenses incurred on behalf
of the  Partnership.  Such  expenses are included in general and  administrative
expenses in the accompanying statements of operations.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The

                                     III-22

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


3. RELATED PARTY TRANSACTIONS - Continued

amount of the  Management  Fee shall not exceed  0.25% of  invested  assets,  as
defined  in  the   Partnership   Agreement,   and  shall  be  payable  from  the
Partnership's  cash available for  distribution,  as defined in the  Partnership
Agreement, as of the end of each calendar year, as follows:

     (i)  First,  on  a  monthly  basis  as  an  operating  expense  before  any
          distributions  to limited partners in the amount computed as described
          in the Partnership  Agreement,  provided that such annual amount shall
          not be greater than $250,000; and

     (ii) Second,  after  distributions to the limited partners in the amount of
          one percent of the gross proceeds of the offering, the balance of such
          0.25% of invested assets.

For each of the years ended December 31, 2007 and 2006, the Partnership paid the
Managing General Partner a Management Fee of $249,996.

     Pursuant to approval of the Partnership's Consent Solicitation Statement on
March 22, 2004, the Managing General Partner is eligible to receive a fee of not
more than five percent of the sale price of an investment in a Local Partnership
or the  property  it owns,  payable  upon the sale of an  investment  in a Local
Partnership or the property it owns, to the extent the Managing  General Partner
markets and sells a property  instead of a real estate broker or unrelated Local
General  Partner.  The  disposition  fee on sales of  partnership  interests (as
opposed to sales of real  property) is  calculated  as up to five percent of the
imputed sale price, which is the amount the Local  Partnership's  property would
have to be sold for to produce the same  distribution  to the  investors  as the
sale of the partnership interests.


4.   PARTNERSHIP PROFITS AND LOSSES, AND DISTRIBUTIONS

     All profits and losses prior to the first date on which Additional  Limited
Partners were admitted were allocated  98.49% to the Initial Limited Partner and
1.51% to the General Partners. Upon admission of the Special Limited Partner and
the Additional Limited Partners, the interest of the Initial Limited Partner was
reduced to 0.49%. Pursuant to the Consent Solicitation  Statement approved March
22, 2004, the net proceeds  resulting from the liquidation of the Partnership or
the Partnership's  share of the net proceeds from any sale or refinancing of the
Local  Partnerships or their rental properties which are not reinvested shall be
distributed and applied as follows:

          (i)  to the  payment  of  debts  and  liabilities  of the  Partnership
               (including all expenses of the  Partnership  incident to the sale
               or  refinancing)  other than loans or other debts and liabilities
               of the  Partnership to any partner or any  affiliate;  such debts
               and liabilities,  in the case of a non-liquidating  distribution,
               to be only those  which are then  required  to be paid or, in the
               judgment of the Managing General Partner, required to be provided
               for;
         (ii)  to the  establishment  of any reserves which the Managing General
               Partner deems reasonably  necessary for contingent,  unmatured or
               unforeseen   liabilities  or   obligations  of  the   Partnership
               (including the Partnership Liquidation Fee);
        (iii)  to each partner in an amount  equal to the  positive  balance in
               his  capital  account as of the date of the sale or  refinancing,
               adjusted  for  operations  and  distributions  to that date,  but
               before  allocation of any profits for tax purposes  realized from
               such  sale or  refinancing  and  allocated  pursuant  to  Section
               4.03(d) of the Partnership Agreement;
         (iv)  to the Limited  Partners (A) an aggregate amount of proceeds from
               sale or refinancing and all prior sales or refinancings  equal to
               their  capital  contributions,  without  reduction for prior cash

                                     III-24

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


4. PARTNERSHIP PROFITS AND LOSSES, AND DISTRIBUTIONS - Continued

               distributions   other  than  prior   distributions  of  sale  and
               refinancing  proceeds,  plus (B) an additional  amount equal to a
               cumulative  non-compounded  six  percent  return on each  limited
               partner's capital contribution, reduced by (1) an amount equal to
               50% of the  losses for tax  purposes  allocated  to such  limited
               partner and (2)  distributions  of net cash flow to each  limited
               partner,  such return,  losses for tax purposes and net cash flow
               distributions  commencing  on the first day of the month in which
               the capital contribution was made;
          (v)  to the repayment of any unrepaid  loans  theretofore  made by any
               partner  or any  affiliate  to the  Partnership  for  Partnership
               obligations and to the payment of any unpaid amounts owing to the
               General Partners pursuant to the Partnership Agreement;
          (vi) to  the  General   Partners  in  the  amount  of  their   capital
               contributions;
         (vii) thereafter, for services to the Partnership,  to General Partner
               Martin C.  Schwartzberg  (or his designee),  whether or not he is
               then a General  Partner,  0.333% of the gross proceeds  resulting
               from (A) such sale (if the proceeds are from a sale rather than a
               refinancing)  and (B) any prior sales from which such fee was not
               paid to the General Partner or his designee; and
       (viii)  the  remainder,   12%  to  the  General   Partners  (or  their
               assignees),  three percent to the Special Limited Partner and 85%
               to  the  Initial  and  Additional   Limited  Partners  (or  their
               assignees).

     Notwithstanding  and in addition to the  foregoing,  the  Managing  General
Partner  may  receive a fee (not to exceed  five  percent of the sales  price of
Apartment  Complexes) from the Partnership or the Local Partnership for services
provided by the Managing  General  Partner  and/or its  Affiliates in connection
with the marketing  and sale of Apartment  Complexes.  Such fee (a  "Disposition
Fee"),  which  shall be payable  pursuant to Section  4.02(a)(i),  shall only be
payable  upon the sale of an  Apartment  Complex or a sale of the  Partnership's
interest in the Local  Partnership (a sale in either of such formats is referred
to in this Section  4.02(a) as a "sale of an Apartment  Complex"),  and shall be
subject to the following restrictions: (i) all property disposition fees and any
other commissions  payable upon the sale of any Apartment Complex,  inclusive of
any fees to the General Partners and/or their  Affiliates,  shall not exceed the
lesser of the competitive rate paid to third parties for similar services or six
percent  of the  sales  price  of the  applicable  Apartment  Complex,  (ii) the
Managing General Partner and/or its Affiliates must provide substantial services
in connection  with the marketing and sales effort (as determined by the General
Partners),  and (iii) Dockser and Willoughby shall waive their respective shares
of the one percent fee payable under Section 4.02(a)(vii) above.

     Notwithstanding  any other  provision of this Agreement to the contrary and
in  addition to the  foregoing,  the  Managing  General  Partner was  authorized
pursuant to the approved  proxy  statement to receive a partnership  liquidation
fee of $500,000,  payable only if the Managing  General Partner is successful in
liquidating all of the Partnership's  investments within 36 months from the date
the liquidation was approved.  As the liquidation was not completed by March 22,
2007, the Managing General Partner did not earn the liquidation fee.

     Fees payable to certain general  partners (or their  designees) under (vii)
above,  together  with  all  other  property  disposition  fees  and  any  other
commissions or fees payable upon the sale of apartment properties,  shall not in
the aggregate  exceed the lesser of the  competitive  rate or six percent of the
sale price of the apartment properties.

     There can be no assurance that the Liquidation  will be completed  pursuant
to the Plan of Liquidation and Dissolution.

                                     III-25

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


4. PARTNERSHIP PROFITS AND LOSSES, AND DISTRIBUTIONS - Continued

     Pursuant to the Partnership Agreement, all cash available for distribution,
as defined, shall be distributed,  not less frequently than annually, 97% to the
Additional  Limited  Partners,  1% to the Special Limited Partner,  0.49% to the
Initial Limited  Partner and 1.51% to the General  Partners after payment of the
Management Fee (see Note 3), as specified in the Partnership Agreement. On April
4, 2006, the  Partnership  made a tax  distribution  of $252,862  (approximately
$7.20 per Unit) on behalf of Additional  Limited Partners who were not residents
of Ohio.

     As  defined  in  the  Partnership  Agreement,  after  the  payment  of  the
distribution described in the previous paragraph, after the establishment of any
reserves deemed  necessary by the Managing  General Partner and after payment of
the  Management  Fee,  the  Partnership  had no  remaining  cash  available  for
distribution  for the years  ended  December  31,  2007 and 2006.  The  Managing
General Partner currently  intends to retain all of the Partnership's  remaining
undistributed  cash for operating cash reserves  pending  further  distributions
under its Plan of Liquidation and Dissolution.


5.   RECONCILIATION OF THE PARTNERSHIP'S FINANCIAL STATEMENT NET INCOME
       TO TAXABLE INCOME


     For  federal  income  tax  purposes,  the  Partnership  reports  on a basis
whereby:  (i) certain expenses are amortized rather than expensed when incurred;
(ii) certain costs are  amortized  over a shorter  period for tax  purposes,  as
permitted by the Internal  Revenue Code and  underlying  regulations,  and (iii)
certain  costs  are  amortized  over a  longer  period  for  tax  purposes.  The
Partnership  records  its  share of income or  losses  from its  investments  in
limited  partnerships  for federal  income tax purposes as reported on the Local
Partnerships'  federal income tax returns (see Note 2.g.),  including  losses in
excess of related investment  amounts.  These returns are subject to examination
and, therefore, possible adjustment by the IRS.

     A  reconciliation  of the  Partnership's  financial  statement  net loss to
taxable income follows.

<TABLE>
<CAPTION>
                                                               For the years ended
                                                                   December 31,
                                                             -----------------------------
                                                                2007              2006
                                                             -----------       -----------
<S>                                                          <C>               <C>
Financial statement net loss                                 $  (471,865)      $  (531,175)

Adjustments:
  Differences between financial statement net
    income and taxable income related to the
    Partnership's equity in the Local Partnerships'
    income or losses and accrued expenses                        364,508           118,894

  Differences between financial statement gain
    (loss) and tax gain (loss) from the sale or
    transfer of properties                                     2,240,316         1,141,826
                                                             -----------       -----------

Taxable income                                               $ 2,132,959       $   729,545
                                                             ===========       ===========
</TABLE>

Cash concentration risk
-----------------------

     Financial   instruments  that   potentially   subject  the  Partnership  to
concentrations of risk consist primarily of cash. The Partnership  maintains two
cash  accounts  with the same bank.  The  balances  are  insured by the  Federal
Deposit  Insurance  Corporation  up to $100,000.  As of December  31, 2007,  the
uninsured portion of the cash balances was $4,711,195.

                                      # # #

                                     III-25

<PAGE>
                                EXHIBIT No. 99 b.

None.