<PAGE>
                    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, 1999
                              -----------------

Commission file number             0-11973
                              -----------------

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP
-----------------------------------------------------------------------
                 (Name of small business issuer in its charter)

          Maryland                                      52-1321492
-----------------------------------------         ---------------------
     (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                Identification No.)

11200 Rockville Pike, Rockville, Maryland                 20852
-----------------------------------------         ---------------------
(Address of principal executive offices)                (Zip Code)

Issuer's telephone number      (301) 468-9200
                               --------------

Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of each exchange
     Title of each class                          on which registered
            NONE                                            N/A
-----------------------------------------         ---------------------

Securities registered pursuant to Section 12(g) of the Act:

                          LIMITED PARTNERSHIP INTERESTS
-----------------------------------------------------------------------
                                (Title of class)

     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 [ ]

     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 $5,950,412.

     The limited partner interests of the Registrant are not traded in any
market.  Therefore, the limited partner interests 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
                             (a limited partnership)

                        1999 ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS


                                                                 Page
                                                                 ----
                                     PART I
                                     ------

Item 1.  Business   . . . . . . . . . . . . . . . . . . . .      I-1
Item 2.  Properties   . . . . . . . . . . . . . . . . . . .      I-5
Item 3.  Legal Proceedings  . . . . . . . . . . . . . . . .      I-5
Item 4.  Submission of Matters to a Vote
           of Security Holders  . . . . . . . . . . . . . .      I-6


                                     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-3
Item 7.  Financial Statements   . . . . . . . . . . . . . .      II-10
Item 8.  Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure   . . . .      II-10


                                    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 and Reports on Form 8-K   . . . . . . . .      III-4

Signatures  . . . . . . . . . . . . . . . . . . . . . . . .      III-6

Financial Statements  . . . . . . . . . . . . . . . . . . .      III-9
<PAGE>
<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 limited partnership interests through a public offering which
was managed by Merrill Lynch, Pierce, Fenner and Smith, Incorporated.  The
Partnership closed the offering on June 20, 1983 when it became fully
subscribed.

     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 a limited
partner interest in limited partnerships (Local Partnerships).  The Partnership
originally made investments in 22 Local Partnerships.  As of December 31, 1999,
the Partnership had investments in 17 Local Partnerships.  Each of these Local
Partnerships owns a federal or state government-assisted or conventionally
financed apartment complex, which provides housing principally to the elderly or
to individuals and families of low or moderate income.  The original objectives
of these investments, not necessarily in order of importance, were to:

     (1)  preserve and protect the Partnership's capital;
     (2)  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 may use to offset income from other sources;
     (3)  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
     (4)  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 has invested were organized
by private developers who acquired the sites, or options thereon, applied for
applicable mortgage insurance and/or subsidies, and, in general remain as the
local general partners in the Local Partnerships.  However, in the event of
non-compliance with the Local Partnerships' partnership agreements, the local
general partner may be removed and replaced with another local general partner
or with an affiliate of the Partnership's Managing General Partner.  As a result
of its investment in the Local Partnerships, the Partnership became the
principal limited partner in these Local Partnerships.    As a limited partner,
the Partnership's legal liability for obligations of the Local Partnerships is
limited to its investment.  In most cases, an affiliate of the Managing General
Partner of the Partnership is also a general partner of the Local Partnerships.
In most cases, the local general partners of the Local Partnerships retain
responsibility for developing, constructing, maintaining, operating and managing
the projects.  Additionally, the local general partners and affiliates of the
Managing General Partner may operate other apartment complexes which may be in
competition for eligible tenants with the Local Partnerships' apartment
complexes.


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

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

     Although each of the Local Partnerships in which the Partnership has
invested owns an apartment complex that must compete in the market place for
tenants, interest subsidies and/or rent supplements from governmental agencies
generally make it possible to offer certain of these 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 complexes described below which would adversely
impact the Partnership, except in specific circumstances as described in Part
II, Item 6, Management's Discussion and Analysis of Financial Condition and
Results of Operations.















































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

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

     A schedule of the apartment complexes owned by Local Partnerships in
which the Partnership has an investment follows.

          SCHEDULE OF APARTMENT COMPLEXES OWNED BY LOCAL PARTNERSHIPS
           IN WHICH CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP
                              HAS AN INVESTMENT(1)
<TABLE>
<CAPTION>
                                                                                                     Units         Expiration
                             Mortgage                                                            Authorized for        of
 Name and Location          Payable at            Financed and/or Insured          Number of      Rental Asst.      Section 8
of Apartment Complex       12/31/99 (2)           and/or Subsidized Under         Rental Units    Under Sec. 8     HAP Contract
--------------------       ------------        -----------------------------      ------------   --------------    -------------
<S>                        <C>                 <C>                                <C>            <C>               <C>
Arrowhead Apts.            $ 6,898,329         Illinois Housing Development            200             40           05/31/01
 Palatine, IL                                   Authority (IHDA)


Chevy Chase Park             3,420,049         Metropolitan Savings Bank               232            228           04/22/00 (4)
 Centerville, OH                                (MSB)/FHA

Country Place I              7,244,088         Maryland Community Development          192             38           08/10/09
 Burtonsville, MD                               Administration (MCDA)


Country Place II             4,390,356         HUD                                     120             24           08/29/00
 Burtonsville, MD

Four Winds West                943,288         GMAC HUD Insured through Section         62             62           10/14/00 (4)
 Birmingham, AL                                 221 (d)(4) of the NHA/Section 8

Frenchman's Wharf II         7,923,103         FHA                                     324             31           11/30/00 (4)
 New Orleans, LA

Golden Acres                 1,218,319         California Housing Finance Agency        46             45           12/30/12
 Chowchilla, CA                                 (CHFA)/Section 8

Mercy Terrace                8,503,960         Section 221(d)(4) of the NHA/           158            157           11/30/03
 San Francisco, CA                              Section 8

The Moorings                 8,179,447         IHDA                                    216             44           03/31/17
 Roselle, IL

Orangewood Plaza             1,826,500         CHFA                                     40             33           07/01/14 (5)
 Orange Cove, CA

Posada Vallarta             14,792,231         Conventional                            336             70           02/16/04
 Phoenix, AZ

Princeton Community          7,963,343         New Jersey Housing & Mortgage           239             26           10/01/24 (4)
 Village                                        Finance Agency
 Princeton, NJ

</TABLE>
                                  (Continued)

                                       I-3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                     Units         Expiration
                             Mortgage                                                            Authorized for        of
 Name and Location          Payable at            Financed and/or Insured          Number of      Rental Asst.      Section 8
of Apartment Complex       12/31/99 (2)           and/or Subsidized Under         Rental Units    Under Sec. 8     HAP Contract
--------------------       ------------        -----------------------------      ------------   --------------    -------------
<S>                        <C>                 <C>                                <C>            <C>               <C>
Rock Glen                  $ 3,615,316         Section 221(d)(4) of the NHA            241              0              --
 Baltimore, MD

Rolling Green at             4,382,759         Massachusetts Housing Finance           204             97           03/01/12
 Amherst                                        Agency (MHFA)/236
 Amherst, MA

Rolling Green at             8,763,574         MHFA/236                                404            284           10/10/12
 Fall River
 Fall River, MA

Troy Manor Apts.               841,205         Rural Housing & Community                50             50           10/29/00
 Troy, AL                                       Development Services (RHCD)/Section 8

Westgate Tower Apts.         1,929,369         Michigan Sate Housing Develop-          148             39           12/01/14
 Westland, MI                                   ment Authority/236
--------------------       -----------                                            --------       --------
Totals(3) 17               $92,835,236                                               3,212          1,268
                           ===========                                            ========       ========

</TABLE>






























                                       I-4
<PAGE>

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

<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       1999    1998   1997   1996   1995            1999      1998        1997        1996       1995
--------------------       ----    ----   ----   ----   ----          --------  --------    --------    --------   --------
<S>                        <C>     <C>    <C>    <C>    <C>           <C>       <C>         <C>         <C>        <C>
Arrowhead Apts.             98%     97%    99%    91%    93%          $  9,852  $  9,755    $  9,044    $  9,205   $  9,025
 Palatine, IL

Chevy Chase Park            96%     92%    97%    97%    99%             4,077     4,291       4,360       4,232      4,224
 Centerville, OH

Country Place I             98%     97%    96%    96%    92%             9,819     9,557       9,330       8,922      8,902
 Burtonsville, MD

Country Place II            97%     98%    97%    93%    93%            10,002     9,821       9,484       9,192      8,833
 Burtonsville, MD

Four Winds West             98%     99%    97%    99%    98%             5,006     5,075       5,079       4,899      4,537
 Birmingham, AL

Frenchman's Wharf II        95%     94%    92%    89%    90%             4,965     4,753       4,681       4,295      4,171
 New Orleans, LA

Golden Acres                87%     98%   100%   100%   100%             6,324     6,443       6,495       6,297      6,271
 Chowchilla, CA

Mercy Terrace              100%    100%    99%   100%   100%            14,820    14,836      14,801      15,045     15,898
 San Francisco, CA

The Moorings                96%    100%    94%    97%    97%             9,679     9,693       9,372       9,231      8,577
 Roselle, IL

Orangewood Plaza           100%    100%   100%   100%   100%             2,382     2,414       2,419       2,353      2,700
 Orange Cove, CA

Posada Vallarta             87%     86%    96%    89%    96%             6,868     7,193       6,623       6,808      6,616
 Phoenix, AZ

Princeton Community
 Village                    97%     96%    93%    98%    97%             7,126     7,036       7,132       6,785      6,510
 Princeton, NJ

Rock Glen                   97%     99%    99%    97%    94%             5,354     5,176       5,011       4,724      4,864
 Baltimore, MD

Rolling Green at Amherst   100%    100%   100%   100%   100%             8,998     7,532       7,345       7,333      7,314
 Amherst, MA

</TABLE>
                                  (Continued)



                                      I-5
<PAGE>

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

<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       1999    1998   1997   1996   1995            1999      1998        1997        1996       1995
--------------------       ----    ----   ----   ----   ----          --------  --------    --------    --------   --------
<S>                        <C>     <C>    <C>    <C>    <C>           <C>       <C>         <C>         <C>        <C>
Rolling Green at            97%     96%    99%    96%    98%          $  7,661  $  7,028    $  7,233    $  7,163   $  7,177
 Fall River
 Fall River, MA

Troy Manor Apts.           100%    100%   100%   100%   100%             4,664     4,681       4,677       4,680      4,681
 Troy, AL

Westgate Tower Apts.        95%     96%    98%   100%    99%             3,618     3,633       3,702       3,551      3,471
 Westland, MI
                           ----    ----   ----   ----   ----          --------  --------    --------    --------   --------
Totals(3) 17                96%     97%    97%    97%    97%          $  7,130  $  6,995    $  6,870    $  6,748   $  6,692
                           ====    ====   ====   ====   ====          ========  ========    ========    ========   ========

</TABLE>

(1)  All properties are multifamily housing complexes.  No single
     tenant/resident 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 amounts provided are the balances of first mortgage loans payable by
     the Local Partnerships as of December 31, 1999.

(3)  The totals for the percentage of units occupied and the average effective
     annual rental per unit are based on a simple average.

(4)  The Section 8 contract expiration date reflects an extension from the
     original expiration date, in accordance with Federal legislation.

(5)  Expiration of CHFA subsidy.

     On February 19, 1998 and March 18, 1998, the local managing general
partners of Tanglewood II and Deer Grove, respectively, sold the properties.
See the notes to the financial statements for additional information concerning
these sales.

     On October 5, 1999, the Partnership's interests in Beech Hill I and Beech
Hill II were transferred to the purchase money noteholders, due to the non-
payment on the related purchase money notes.  See the notes to the financial
statements for additional information concerning these interests.

     On December 15, 1999, the Partnership sold its interest in Wexford Ridge.
See the notes to the consolidated financial statements for additional
information concerning the sale.



                                       I-6
<PAGE>
                                     PART I
                                     ------

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

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


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

     On February 10, 1998, the Partnership was served with a complaint by the
two holders of one of the purchase money notes related to Chevy Chase suing the
Partnership, Managing General Partner and C.R.H.C., Incorporated (CRHC), an
affiliate of the Managing General Partner, for damages and seeking foreclosure
on the Partnership's interest in the Local Partnership.  The Managing General
Partner successfully negotiated an agreement with the holders of the purchase
money note and the note was paid off, at a discount, on October 5, 1998.  As
part of this agreement, the complaint was dismissed.

     On April 7, 1998, the Partnership was served with a complaint by the holder
of two purchase money notes related to Wexford Ridge suing the Partnership,
Managing General Partner and CRHC for damages and seeking foreclosure on the
Partnership's interest in the Local Partnership.  The Managing General Partner
successfully negotiated an agreement with the holder of the notes and the notes
were paid off, at a discount, on October 5, 1998.  As part of this agreement
with the noteholder, the complaint was dismissed.

     On August 9, 1999, the noteholder filed a complaint seeking declaratory
judgement that the Partnership has forfeited to the noteholders its interest in
Princeton.  The parties are negotiating a settlement of the litigation.

     On December 30, 1999, the Partnership was served with a complaint by
certain alleged beneficiaries of one of the purchase money notes related to
Chevy Chase (First Chase Note) for, among other relief, their portion of
payments made to First March Realty Corporation on the First Chase Note.  The
Managing General Partner is vigorously defending its position that all such
payments were made to the proper parties, and that it has no further
responsibility or liability for payments made on the First Chase Note.

     See the notes to the financial statements for additional information
concerning these legal proceedings.


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 1999.











                                       I-7
<PAGE>
                                     PART II
                                     -------

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

     (a)  On November 1, 1999, Odd Lot Liquidity Fund, LLC (Odd Lot), an
          affiliate of an additional limited partner of the Partnership,
          initiated an unregistered tender offer to purchase no more than 4.9%
          of the outstanding units of additional limited partnership interest
          (Units) of the Partnership at a price of $50 per Unit.  Odd Lot, which
          is unaffiliated with the Partnership, stated that it made the offer
          for the express purpose of holding the Units for investment purposes
          and not with a view to resale.  The price offered was determined
          solely at the discretion of Odd Lot and did not necessarily represent
          the fair market value of each Unit.  The Odd Lot offer expired on
          December 3, 1999, and as of March 30, 2000, the entity to which Odd
          Lot assigned its newly acquired Units held 1.6% of the Units in the
          Partnership.  Other than any other tender offers, it is not
          anticipated that there will be any formal market for resale of Units.
          As a result, investors may be unable to sell or otherwise dispose of
          their Units in the Partnership.

          During 1999, a number of investors sold their Units in the Partnership
          to other investors, as a result of an unregistered tender offer made
          in December 1998.  If more than 5% of the total outstanding Units in
          the Partnership are transferred in any one calendar year (not counting
          certain exempt transfers), the Partnership could be taxed as a
          "publicly traded partnership," with potentially severe tax
          implications for the Partnership and its investors.  Specifically, the
          Partnership would be taxed as a corporation and the income and losses
          from the Partnership would no longer be considered a passive activity.
          From January 1, 1999 through June 1, 1999, approximately 4.9% of
          outstanding Units were sold.  Accordingly, to remain within the 5%
          safe harbor, effective June 1, 1999, the General Partner of the
          Partnership halted recognition of any transfers that would exceed the
          safe harbor limit through December 31, 1999.  As a result, transfers
          of Units due to sales transactions were not recognized by the
          Partnership between June 1 and December 31, 1999.

     (b)  As of March 30, 2000 there were approximately 3,700 registered holders
          of additional limited partnership interests in the Partnership.

     (c)  For the year ended December 31, 1999, the Partnership made a cash
          distribution of $1,697,110 ($34.00 per additional limited partnership
          interest) to the Additional Limited Partners on October 29, 1999, to
          holders of record as of October 1, 1999.  Additionally, the
          Partnership made a cash distribution of $1,622,237 ($32.50 per
          additional limited partnership interest) to the Additional Limited
          Partners on January 28, 2000, to holders of record as of December 15,
          1999; this distribution was a result of the sale of Wexford Ridge.











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

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

          For the year ended December 31, 1998, the Partnership made a cash
          distribution of $499,350 ($10.00 per additional limited partnership
          interest) to the Additional Limited Partners on November 18, 1998.
          The distribution was a result of the refinancing of the Arrowhead and
          Moorings mortgage loans.

          The Partnership received distributions of $4,156,788 and $7,672,840
          from Local Partnerships during 1999 and 1998, respectively.  Some of
          the Local Partnerships operate under restrictions imposed by the
          pertinent governmental agencies that limit the cash return available
          to the Partnership.













































                                      II-2
<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 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.

                                     General
                                     -------

     The Partnership has invested, through Local Partnerships, primarily in
federal or state government-assisted apartment complexes (the properties)
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, 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 limited partnerships.
Only limited annual cash distributions from property operations were projected
because of the regulatory restrictions on cash distributions from the
properties.

     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, the Managing General
Partner continues to concentrate on transferring the source of investment yield
from tax benefits to cash flow wherever possible, and on potentially enhancing
the ability of the Partnership to share in the appreciated value of the
properties.

     The acquisition of interests in certain Local Partnerships was paid for in
part by purchase money notes of the Partnership.  The purchase money notes are
nonrecourse obligations of the Partnership which typically mature 15 years from
the date of acquisition of the interest in a particular Local Partnership, and
are generally secured by the Partnership's interest in the Local Partnership.

     C.R.I., Inc. (the Managing General Partner) has been working to develop a
strategy to sell certain properties by utilizing opportunities presented by
federal affordable housing legislation, favorable financing terms and
preservation incentives available to not-for-profit purchasers.  The Managing
General Partner intends to utilize all or part of the Partnership's net proceeds
(after a partial distribution to limited partners) received from the sales of
properties to fund reserves for paying at maturity, prepaying or purchasing



                                      II-3
<PAGE>
                                     PART II
                                     -------

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

prior to maturity, at a discount where possible, currently outstanding purchase
money notes.  The Managing General Partner believes that this represents an
opportunity to reduce the Partnership's long-term obligations.

     Some of the rental properties owned by the Local Partnerships are financed
by state housing agencies.  The Managing General Partner has been working to
develop strategies to sell or refinance certain properties pursuant to programs
developed by these agencies.  These programs may include opportunities to sell a
property to a qualifying purchaser who would agree to maintain the property as
low to moderate income housing in perpetuity, or to refinance a property, or to
obtain supplemental financing.  The Managing General Partner continues to
monitor certain state housing agency programs, and/or programs provided by
certain lenders, to ascertain whether the properties 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.

     Some of the rental properties owned by the Local Partnerships are dependent
on the receipt of project-based Section 8 Rental Housing Assistance Payments
(HAP) provided by the U.S. Department of Housing and Urban Development (HUD)
pursuant to Section 8 HAP contracts.  Current legislation allows all expired
Section 8 HAP contracts with rents at less than 100% of fair market rents to be
renewed for one year.  Expiring Section 8 HAP contracts with rents that exceed
100% of fair market rents could be renewed for one year, but at rents reduced to
100% of fair market rents (Mark-to-Market).  All expiring Section 8 HAP
contracts with rents exceeding comparable market rents, and properties with
mortgage loans insured by the Federal Housing Administration (FHA), became
subject to the Mark-to-Market legislation.

     Mark-to-Market implementation will reduce rental income at properties which
are currently subsidized at higher-than-market rental rates, and will therefore
lower cash flow available to meet mortgage payments and operating expenses.
Each affected property may undergo debt restructuring according to terms
determined by an individual property and operations evaluation.  This may
involve reducing the first mortgage loan balance to an amount supportable by the
property, taking into account the property's operating expenses and reduced
income.  The balance of the amount written down from the first mortgage loan
will be converted to a non-performing but accruing (soft) second mortgage loan.

     In many instances, the Mark-to-Market rental rate restructuring may require
the write down of an FHA-insured mortgage loan, which would trigger cancellation
of indebtedness income to the partners, a taxable event, even though no actual
cash is received.  Additionally, if the existing first mortgage loan is
bifurcated into a first and second mortgage loan, the newly created second
mortgage loan will accrue interest at a below-market rate; however, the Internal
Revenue Service issued a ruling in July 1998 that concluded that the below-
market rate of interest will not generate additional ordinary income.  Each
property subject to Mark-to-Market will be affected in a different manner, and
it is very difficult to predict the exact form of restructuring, or potential
tax liabilities to the limited partners, at this time.

     There is a new HUD-sponsored program generally referred to as "Mark-up-to-
Market".  Under this program, properties with expiring Section 8 contracts that
are located in high-rent areas as defined by HUD are eligible for rent increases
which would be necessary to bring Section 8 rents in line with market rate
rents.  For properties which enter the program and which have  subsidized FHA

                                      II-4
<PAGE>
                                     PART II
                                     -------

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

loans, the rents are adjusted to take into account the benefits the property is
already receiving from the below-market interest rate by means of a HUD
determined Interest Subsidy Adjustment Factor.  The purpose of this program is
to incentivize owners of properties with expiring Section 8 contracts not to
convert these properties to market rate housing.

     In return for receiving market rate rents under Mark-up-to-Market, the
property owner must enter into a five year conditional Section 8 contract with
HUD, subject to the annual availability of funding by Congress.  In addition,
property owners who enter into the Mark-up-to-Market program will receive a
waiver from the cash flow restriction imposed on the property by the limited
dividend limitation.

     The Managing General Partner is considering new strategies to deal with the
ever changing environment of affordable housing policy.  The Section 236 and
Section 221(d)(3) mortgage loans may be eligible for pre-payment in their 18th
year or later.  Properties with expiring Section 8 HAP contracts may become
convertible to market rate apartment properties.  Currently, there are few
lenders that will provide financing either to prepay existing mortgage loans of
these types or provide additional funds to allow a property to convert to market
rate units.  Where opportunities exist, the Managing General Partner will
continue to work with the Local Partnerships to develop strategies that make
economic sense for all parties involved.

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

     As of December 31, 1999, the Partnership had approximately 3,700 investors
who subscribed to a total of 50,000 units of limited partner interests in the
original amount of $50,000,000.  The Partnership originally made investments in
22 Local Partnerships, of which 17 remain at December 31, 1999.  The Part-
nership's liquidity, with unrestricted cash resources of $8,936,520 as of
December 31, 1999, along with anticipated future cash distributions from the
Local Partnerships, is expected to be adequate to meet its current and
anticipated operating cash needs.  During 1999 and 1998, the Partnership
received cash distributions of $4,156,788 and $7,672,840, respectively, from the
Local Partnerships.  As of March 30, 2000, there were no material commitments
for capital expenditures.

     The Partnership's obligations with respect to its investments in Local
Partnerships, in the form of purchase money notes having a principal balance of
$7,348,747 plus accrued interest of $22,374,877 as of December 31, 1999, are
payable in full upon the earliest of:  (1) sale or refinancing of the respective
Local Partnership's rental property; (2) payment in full of the respective Local
Partnership's permanent loan; or (3) maturity.  Purchase money notes in the
principal amounts of $1,050,000 and $950,000 matured on December 31, 1996 and
December 31, 1997, respectively, and were paid off, at a discount, on October 5,
1998.  Purchase money notes in the principal amounts of $1,050,000 and $950,000
matured on December 31, 1996 and 1997, respectively, and were extended to
January 5, 2001, but were paid off, at a discount, on September 30, 1999.
Purchase money notes in the aggregate principal amount of $2,380,000 matured on
January 1, 1998, and were written off on October 5, 1999 when the related local
partnership interests, held by the Partnership, were transferred to the
noteholders in full satisfaction of the purchase money notes' principal and
accrued interest.  Purchase money notes in the aggregate principal amount of

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

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

$3,150,000 matured on June 1, 1998, and have not been paid or extended.
Purchase money notes in the original principal amounts of $4,600,000 and
$1,927,500 matured on August 31, 1998, were partially paid down, with the
balances extended to August 31, 2003.  A purchase money note in the principal
amount of $1,450,000 matured on September 1, 1998, and has not been paid or
extended.  Purchase money notes in the aggregate principal amount of $840,178
matured on January 1, 1999 and were paid off, at a discount, on February 5,
1999.  Purchase money notes in the aggregate principal amount of $500,000
matured on January 1, 1999 and have not been paid or extended.  See the notes to
the financial statements for additional information concerning these purchase
money notes.

     The purchase money notes, which are nonrecourse to the Partnership, are
generally secured by the Partnership's interest in the respective Local
Partnerships.  There is no assurance that the underlying properties will have
sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes' principal and accrued interest when due.  If a purchase money note
is not paid in accordance with its terms, the Partnership will either have to
renegotiate the terms of repayment or risk losing its partnership interest in
the respective Local Partnership.  The Partnership's inability to pay certain of
the purchase money note principal and accrued interest balances when due, and
the resulting uncertainty regarding the Partnership's continued ownership
interest in the related Local Partnerships, does not adversely impact the
Partnership's financial condition because the purchase money notes are
nonrecourse and secured solely by the Partnership's interest in the related
Local Partnerships.  Therefore, should the investment in any of the Local
Partnerships with maturing purchase money notes not produce sufficient value to
satisfy the related purchase money notes, the Partnership's exposure to loss is
limited because the amount of the nonrecourse indebtedness of each of the
maturing purchase money notes exceeds the carrying amount of the investment in,
and advances to, each of the related Local Partnerships.  Thus, even a complete
loss of the Partnership's interest in one of these Local Partnerships would not
have a material adverse impact on the financial condition of the Partnership.

     The following chart presents information related to purchase money notes
which have matured through December 31, 1999, and which remain unpaid or
unextended as of March 30, 2000.  Excluded from the following chart are purchase
money notes which matured through December 31, 1999, and which have been paid
off, cancelled, or extended on or before March 30, 2000.

















                                      II-6
<PAGE>
                                     PART II
                                     -------

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

<TABLE>
<CAPTION>


                                                                                                     Carrying Amount
                                                                          Aggregate                  of Partnership's
                                               Aggregate                   Accrued                    Investment in
                                               Principal                  Interest                   and Advances to
                   Number of                    Balance                    Balance                   Underlying Local
                   Underlying                    as of                      as of                    Partnerships as
 Purchase Money      Local       Percentage     December    Percentage     December      Percentage     of December    Percentage
 Note Maturity    Partnerships    of Total      31, 1999     of Total      31, 1999       of Total       31, 1999       of Total
----------------  ------------   ----------   -----------   ----------   -------------   ----------  ----------------  ----------
<S>               <C>            <C>          <C>           <C>          <C>             <C>         <C>               <C>
2nd Quarter 1998       1               6%     $ 3,150,000         43%     $ 5,620,434         25%               --          --
3rd Quarter 1998       1               6%       1,450,000         20%       2,131,262          9%       $  710,881          74%
1st Quarter 1999       1               6%         500,000          7%       1,527,514          7%               --          --
                     ----          -----      -----------      -----      -----------      -----        ----------       -----
                       3              18%     $ 5,100,000         70%     $ 9,279,210         41%       $  710,881          74%
                     ====          =====      ===========      =====      ===========      =====        ==========       =====

Total, Local
  Partnerships        17             100%     $ 7,348,747        100%     $22,374,877        100%       $  966,378         100%
                     ====          =====      ===========      =====      ===========      =====        ==========       =====

</TABLE>

     The Managing General Partner is continuing to investigate possible
alternatives to reduce the Partnership's debt obligations.  These alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note requirements, paying off certain purchase money notes at a
discounted price, extending the due dates of certain purchase money notes,
refinancing the respective properties' underlying debt or selling the underlying
real estate and using the Partnership's share of the proceeds to pay or buy down
certain purchase money note obligations.  Although the Managing General Partner
has had some success applying these strategies in the past, the Managing General
Partner cannot assure that these strategies will be successful in the future.
If the Managing General Partner is unable to negotiate an extension or
discounted payoff, upon maturity of the purchase money notes, if the purchase
money notes remain unpaid, the noteholders may have the right to foreclose on
the Partnership's interest in the related Local Partnerships.  In the event of a
foreclosure, the excess of the nonrecourse indebtedness over the carrying amount
of the Partnership's investment in the related Local Partnership would be deemed
cancellation of indebtedness income which would be taxable to Limited Partners
at a federal tax rate of up to 39.6%.  Additionally, in the event of a
foreclosure, the Partnership would lose its investment in the Local Partnership
and, likewise, its share of any future cash flow distributed by the Local
Partnership from rental operations, mortgage debt refinancings, or the sale of
the real estate.  Of the 17 Local Partnerships in which the Partnership is
invested as of December 31, 1999, the three local Partnerships with associated
purchase money notes which have matured  and which remain unpaid or unextended
as of March 30, 2000, represent the following percentages of the Partnership's
total distributions received from Local Partnerships and share of income from
Local Partnerships.


                                      II-7
<PAGE>
                                     PART II
                                     -------

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

<TABLE>
<CAPTION>


                            Percentage of Total      Partnership's Share of
                           Distributions Received      Income (loss) from
    For the Years Ending   from Local Partnerships     Local Partnerships
    --------------------   -----------------------   ----------------------
    <S>                    <C>                       <C>
    December 31, 1999                1%                     $ 17,578
    December 31, 1998                1%                      234,121

</TABLE>

     The Managing General Partner continues to address the maturity and
impending maturity of its debt obligations and to seek strategies which will
provide the most favorable outcome to the limited partners.  However, there can
be no assurance that these strategies will be successful.

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient cash is available for operating requirements.
In 1999 and 1998, the receipt of distributions from Local Partnerships was
adequate to support operating cash requirements.  Cash and cash equivalents
increased during 1999, as net cash used in operating activities and to pay off
or pay down five of the Partnership's purchase money notes was less than cash
provided by investing activities.

     The Partnership made a cash distribution of $1,697,110 ($34.00 per
additional limited partnership interest) to the Additional Limited Partners on
October 29, 1999, to holders of record as of October 1, 1999.  Additionally, the
Partnership made a cash distribution of $1,622,237 ($32.50 per additional
limited partnership interest) to the Additional Limited Partners on January 28,
2000, to holders of record as of December 15, 1999; this distribution was as a
result of the sale of Wexford Ridge.  The Managing General Partner intends to
reserve all of the Partnership's remaining undistributed cash for the possible
repayment, prepayment or retirement of the Partnership's outstanding purchase
money notes related to the Local Partnerships.

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

1999 Versus 1998
----------------

     The Partnership's net income for the year ended December 31, 1999 increased
from the year ended December 31, 1998 primarily due to extraordinary gain from
extinguishment of debt related to the discounted payoffs of the Four Winds West
and Troy Manor purchase money notes during the first quarter, and the discounted
payoffs of the Chevy Chase and Wexford Ridge purchase money notes in September
1999, as discussed in the notes to the financial statements.  Contributing to
the increase was a gain on disposition of investment in partnership related to
the sale of the Partnership's interest in Wexford Ridge in December 1999.  Also
contributing to the increase in the Partnership's net income were a decrease in
interest expense due to the discount on purchase money notes being fully
amortized as of December 31, 1998, a decrease in general and administrative

                                      II-8
<PAGE>
                                     PART II
                                     -------

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

expenses due to lower reimbursed payroll costs, and a decrease in professional
fees primarily due to a decrease in legal fees related to the Chevy Chase and
Wexford Ridge litigation in 1998.  Offsetting the increase in the Partnership's
net income was a decrease in share of income from partnerships due to the
receipt of proceeds from the refinancing of the first mortgage loans on
Arrowhead and Moorings during the second quarter of 1998, and a decrease in
interest and other income due to generally lower rates earned on cash and cash
equivalents and lower cash and cash equivalents balances during 1999.

     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 recognized losses included in share of income from
partnerships for the years ended December 31, 1999 and 1998 did not include
losses of $1,883,929 and $1,594,602, respectively.  The Partnership's net loss
recognized from the Local Partnerships is generally expected to decrease in
subsequent years as the Partnership's investments in the Local Partnerships are
reduced to zero.  Accordingly, excludable losses are generally expected to
increase.  Distributions of $1,609,522 and $6,040,363, received from seven and
nine Local Partnerships during 1999 and 1998, respectively, were offset against
the respective years' recorded losses because these amounts were in excess of
the Partnership's investment.

                                    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.  Future inflation could allow for
appreciated values of the Local Partnerships' properties over an extended period
of time as rental revenues and replacement values gradually increase.

     The following table reflects the combined rental revenues of the properties
for the five years ended December 31, 1999.  Combined rental revenue amounts for
years prior to 1999 have been adjusted to exclude rental revenues from those
properties in which the Partnership no longer is invested at December 31, 1999.


















                                      II-9
<PAGE>
                                     PART II
                                     -------

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

<TABLE>
<CAPTION>
                                                         For the years ended December 31,
                         ----------------------------------------------------------------------------------------------
                            1999                  1998               1997                 1996                1995
                         -----------           -----------        -----------          -----------         -----------
<S>                      <C>            <C>    <C>          <C>   <C>           <C>    <C>          <C>    <C>
Combined Rental
  Revenue                $23,725,806           $23,138,967        $22,679,566          $22,286,601         $22,038,444

Annual Percentage
  Increase                              2.5%                2.0%                1.8%                1.1%

</TABLE>

                            Year 2000 Computer Issue
                            ------------------------

     The Partnership experienced little to no interruption in its computer
operations, or otherwise, as a result of the transition from the year 1999 to
2000.  The Partnership's expenses associated with upgrading and testing its
internal hardware and software systems, data interfaces, business operations and
non-information technology functions which could have been affected by the
transition were not material.


ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
          -------------------------------------------

     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.


















                                      II-10
<PAGE>
                                    PART III
                                    --------

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

     (a), (b) and (c)

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

     (a), (b), (c) and (e)

          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, 63, has been the Chairman of the Board of CRI and a Director
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 a
number of publicly held limited partnerships created to invest in low and
moderate income multifamily apartment properties.  For a period of 2-1/2 years
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
Washington, Mr. Dockser was a practicing attorney in Boston and also was 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.  He is also Chairman of the
Board and a Director of CRIIMI MAE Inc. and CRIIMI, Inc.

H. William Willoughby, 53, has been President, Secretary and a Director of CRI
since January 1990 and Senior Executive Vice President, Secretary and a Director
of CRI from 1974 to 1989.  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.  He is also a Director and
executive officer of CRIIMI MAE Inc. and CRIIMI, Inc.

Susan R. Campbell, 41, is Executive Vice President and Chief Operating Officer.
Prior to joining CRI in March 1985, she was a budget analyst for the B. F. Saul
Advisory Company.  She holds a Bachelor of Science degree in General Business
from the University of Maryland.

Melissa Cecil Lackey, 44, is Senior Vice President and General Counsel.  Prior
to joining CRI in 1990, she was associated with the firms of Zuckerman, Spaeder,
Goldstein, Taylor & Kolker in Washington, D.C. and Hirsch & Westheimer in
Houston, Texas.  She holds a Juris Doctor degree from the University of Virginia
School of Law and a Bachelor of Arts degree from the College of William & Mary.










                                      III-1
<PAGE>
                                    PART III
                                    --------

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

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

     (f)  Involvement in certain legal proceedings.

          None.

     (g)  Promoters and control persons.

          Not applicable.


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

     (a), (b), (c), (d), (e), (f), (g), (i), (j), (k) and (l)

          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 in these sections is incorporated herein by
          reference to Notes 3 and 4 of the notes to the financial statements
          contained in Part III.

     (h)  Termination of employment and change in control arrangements.

          None.


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 to the Partnership to be
          the beneficial owner of more than five percent of the issued and
          outstanding units of additional limited partnership interest (Units),
          at March 30, 2000.
















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

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

          Name and Address of         Amount and Nature        % of total
           Beneficial Owner        of Beneficial Ownership    Units issued
          -------------------      -----------------------    -----------
          Equity Resources Group,         3,324 units             6.6%
            Incorporated, et. al.
            14 Story Street
            Cambridge, MA 02138

     (b)  Security ownership of management.

          The following table sets forth certain information concerning all
          Units beneficially owned, as of March 30, 2000, by each director and
          by all directors and officers as a group of the Managing General
          Partner of the Partnership.


              Name of                   Amount and Nature      % of total
          Beneficial Owner           of Beneficial Ownership  Units issued
          ----------------           -----------------------  ------------
          William B. Dockser                   None                 0%
          H. William Willoughby                None                 0%
          All Directors and Officers
            as a Group (4 persons)             None                 0%

     (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.


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

     (a)  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, which contains disclosure of related party
          transactions, is also incorporated herein by reference.







                                      III-3
<PAGE>
                                    PART III
                                    --------

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

     (b)  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).

     (c)  Indebtedness of management.

          None.

     (d)  Transactions with promoters.

          Not applicable.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

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

          Exhibit No. 3 - Articles of Incorporation and bylaws.

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

          Exhibit No. 10 - Material Contracts.

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

          Exhibit No. 27 - Financial Data Schedule.

          a.   Filed herewith electronically.









                                      III-4
<PAGE>
                                    PART III
                                    --------

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K - Continued
          --------------------------------

          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.)

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

               No reports on Form 8-K were filed during the quarter ended
               December 31, 1999.















































                                      III-5
<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 30, 2000               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 30, 2000               by: /s/ H. William Willoughby
-----------------                ---------------------------------------
DATE                             H. William Willoughby,
                                   Director, President
                                   and Secretary




March 30, 2000               by: /s/ Michael J. Tuszka
-----------------                ---------------------------------------
DATE                             Michael J. Tuszka
                                   Vice President
                                   and Chief Accounting Officer
                                   (Principal Financial Officer
                                   and Principal Accounting Officer)
















                                      III-6
<PAGE>











                         REPORT OF INDEPENDENT CERTIFIED
                         -------------------------------
                               PUBLIC ACCOUNTANTS
                               ------------------


To the Partners
Capital Realty Investors-II
  Limited Partnership

     We have audited the balance sheets of Capital Realty Investors-II Limited
Partnership as of December 31, 1999 and 1998, and the related statements of
operations, changes in partners' deficit and cash flows for the years ended
December 31, 1999 and 1998.  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 did not audit the financial
statements of certain Local Partnerships.  The Partnership's share of income
from these Local Partnerships constitutes $767,601 and $89,034 of income in 1999
and 1998, respectively, included in the Partnership's net income.  The financial
statements of these Local Partnerships were audited by other auditors whose
reports thereon have been furnished to us, and our opinion expressed herein,
insofar as it relates to the amount included for these Local Partnerships, is
based solely upon the reports of the other auditors.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, based upon our audits and the reports of other auditors,
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, 1999 and 1998, and the results of its operations,
changes in partners' deficit and cash flows for the years ended December 31,
1999 and 1998, in conformity with accounting principles generally accepted in
the United States.

                                                              Grant Thornton LLP

Vienna, VA
March 30, 2000







                                      III-7
<PAGE>























              REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS -

                           LOCAL PARTNERSHIPS IN WHICH

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                  HAS INVESTED*





*    The reports of independent certified public accountants - Local
     Partnerships in which Capital Realty Investors-II Limited Partnership has
     invested were filed in paper format under Form SE on March 30, 2000, in
     accordance with the Securities and Exchange Commission's continuing
     hardship exemption granted January 14, 2000.
























                                      III-8
<PAGE>
                CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                                        December 31,
                                                                                                ------------------------------
                                                                                                    1999              1998
                                                                                                ------------      ------------
<S>                                                                                             <C>               <C>
Investments in and advances to partnerships                                                     $    966,378      $  3,218,015
Partnership interests held in escrow                                                                      --         1,044,007
Cash and cash equivalents                                                                          8,936,520         7,596,031
Acquisition fees, principally paid to related parties, net of
  accumulated amortization of $408,934 and $416,201, respectively                                    348,795           405,472
Property purchase costs, net of accumulated amortization of
  $280,099 and $271,968, respectively                                                                252,283           279,650
Other assets                                                                                              --             3,781
                                                                                                ------------      ------------

     Total assets                                                                               $ 10,503,976      $ 12,546,956
                                                                                                ============      ============


                       LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships                                                              $  7,348,747      $ 15,344,182
Accrued interest payable                                                                          22,374,877        27,810,849
Distribution payable                                                                               1,622,237                --
Accounts payable and accrued expenses                                                                127,692           120,654
                                                                                                ------------      ------------
     Total liabilities                                                                            31,473,553        43,275,685
                                                                                                ------------      ------------

Commitments and contingencies

Partners' capital (deficit):

  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                                                         (6,072,409)       (2,753,062)
    Offering costs                                                                                (5,278,980)       (5,278,980)
    Accumulated losses                                                                           (59,635,188)      (72,713,687)
                                                                                                ------------      ------------
      Total partners' deficit                                                                    (20,969,577)      (30,728,729)
                                                                                                ------------      ------------

      Total liabilities and partners' deficit                                                   $ 10,503,976      $ 12,546,956
                                                                                                ============      ============
</TABLE>


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

                                    III-9
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                           STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                     For the years ended
                                                                                                         December 31,
                                                                                                -----------------------------
                                                                                                   1999              1998
                                                                                                -----------       -----------
<S>                                                                                             <C>               <C>
Share of income from partnerships                                                               $ 2,520,032       $ 6,129,573
                                                                                                -----------       -----------

Other revenue and expenses:

  Revenue:
    Interest and other income                                                                       359,744           510,789
                                                                                                -----------       -----------

  Expenses:
    Interest                                                                                      1,532,386         3,729,871
    Management fee                                                                                  249,996           249,996
    General and administrative                                                                      203,296           241,774
    Professional fees                                                                                73,466           136,335
    Amortization of deferred costs                                                                   44,390            45,777
                                                                                                -----------       -----------
                                                                                                  2,103,534         4,403,753
                                                                                                -----------       -----------
      Total other revenue and expenses                                                           (1,743,790)       (3,892,964)
                                                                                                -----------       -----------

Income before gain on disposition of investment in partnership                                      776,242         2,236,609

Gain on disposition of investment in partnership                                                  3,070,636                --
                                                                                                -----------       -----------

Income before extraordinary gain from extinguishment of debt                                      3,846,878         2,236,609

Extraordinary gain from extinguishment of debt                                                    9,231,621           772,571
                                                                                                -----------       -----------

Net income                                                                                      $13,078,499       $ 3,009,180
                                                                                                ===========       ===========

Net income allocated to General Partners (1.51%)                                                $   197,485       $    45,439
                                                                                                ===========       ===========

Net income allocated to Initial and Special Limited Partners (1.49%)                            $   194,870       $    44,837
                                                                                                ===========       ===========

Net income allocated to Additional Limited Partners (97%)                                       $12,686,144       $ 2,918,904
                                                                                                ===========       ===========

Net income per unit of Additional Limited Partner
  Interest based on 50,000 units outstanding                                                    $    253.72       $     58.38
                                                                                                ===========       ===========

</TABLE>

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

                                    III-10
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                   STATEMENTS OF CHANGES IN PARTNERS' DEFICIT



<TABLE>
<CAPTION>

                                                                        Initial and
                                                                          Special           Additional
                                                        General           Limited            Limited
                                                        Partners          Partners           Partners           Total
                                                       -----------      -----------        ------------      ------------
<S>                                                    <C>              <C>                <C>               <C>
Partners' deficit, January 1, 1998                     $(1,157,405)     $(1,128,527)       $(30,952,627)     $(33,238,559)

Distribution of $10.00 per unit of
  Additional Limited Partnership Interest                       --               --            (499,350)         (499,350)

Net income                                                  45,439           44,837           2,918,904         3,009,180
                                                       -----------      -----------        ------------      ------------

Partners' deficit, December 31, 1998                    (1,111,966)      (1,083,690)        (28,533,073)      (30,728,729)

Distributions of $34.00 and $32.50 per unit of
  Additional Limited Partnership Interest                                                    (3,319,347)       (3,319,347)

Net income                                                 197,485          194,870          12,686,144        13,078,499
                                                       -----------      -----------        ------------      ------------

Partners' deficit, December 31, 1999                   $  (914,481)     $  (888,820)       $(19,166,276)     $(20,969,577)
                                                       ===========      ===========        ============      ============


</TABLE>

























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

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

                         STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                     For the years ended
                                                                                                         December 31,
                                                                                                ------------------------------
                                                                                                   1999              1998
                                                                                                -----------       -----------
<S>                                                                                             <C>               <C>
Cash flows from operating activities:
  Net income                                                                                    $13,078,499       $ 3,009,180

  Adjustments to reconcile net income to net cash
    used in operating activities:
    Share of income from partnerships                                                            (2,520,032)       (6,129,573)
    Amortization of deferred costs                                                                   44,390            45,777
    Amortization of discount on purchase money notes                                                     --         1,488,064
    Gain on disposition of investment in partnership                                             (3,070,636)               --
    Extraordinary gain from extinguishment of debt                                               (9,231,621)         (772,571)

    Changes in assets and liabilities:
      Decrease in other assets                                                                        3,781            87,247
      Increase in accrued interest payable                                                        1,532,386         2,289,762
      Payment of purchase money note interest                                                       (25,322)         (851,884)
      Increase in accounts payable and accrued expenses                                               7,038            40,221
                                                                                                -----------       -----------
        Net cash used in operating activities                                                      (181,517)         (793,777)
                                                                                                -----------       -----------
Cash flows from investing activities:
  Receipt of distributions from partnerships                                                      4,156,788         7,672,840
  Proceeds from disposition of investment in partnership                                          3,247,585                --
  Advances made to local partnerships                                                                    --          (803,313)
  Repayment of advances to local partnerships                                                            --           653,313
                                                                                                -----------       -----------
        Net cash provided by investing activities                                                 7,404,373         7,522,840
                                                                                                -----------       -----------

Cash flows from financing activities:
  Payoff of purchase money notes and related interest                                            (1,410,000)       (5,100,001)
  Payment of purchase money note principal                                                       (2,775,257)       (1,503,496)
  Distribution to Additional Limited Partners                                                    (1,697,110)         (499,350)
                                                                                                -----------       -----------
        Net cash used in financing activities                                                    (5,882,367)       (7,102,847)
                                                                                                -----------       -----------
Net increase (decrease) in cash and cash equivalents                                              1,340,489          (373,784)

Cash and cash equivalents, beginning of year                                                      7,596,031         7,969,815
                                                                                                -----------       -----------
Cash and cash equivalents, end of year                                                          $ 8,936,520       $ 7,596,031
                                                                                                ===========       ===========


Supplemental disclosure of cash flow information:

  Cash paid during the year for interest                                                        $   595,144       $ 4,724,456
                                                                                                ===========       ===========
</TABLE>

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

                                     III-12
<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 Partnership Agreement.  The Partnership was formed
     to invest in real estate by acquiring and holding a limited partner
     interest in limited partnerships (Local Partnerships) which own and operate
     federal or state government-assisted or conventionally financed apartment
     properties located throughout the United States, which provide housing
     principally to the elderly or to individuals and families of low or
     moderate income.

          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 officers and
     former employees of CRI or its affiliates.  The Special Limited Partner is
     Two Broadway Associates II, a limited partnership comprised of an affiliate
     and employees of Merrill Lynch, Pierce, Fenner & Smith, Incorporated.

          The Partnership sold 50,000 units at $1,000 per unit of additional
     limited partnership interest through a public offering.  The offering
     period was terminated on June 20, 1983.

     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.

     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, 1999 and 1998, the Partnership's share of cumulative losses
     of 11 and 12 of the Local Partnerships exceeded the amount of the
     Partnership's investments in and advances to those Local Partnerships by
     $24,972,119 and $23,529,345, 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.  As of December 31, 1999 and 1998, cumulative cash
     distributions of $13,110,928 and $11,501,406, respectively, have been
     received from the Local Partnerships for which the Partnership's carrying
     value is zero.  These distributions are recorded as increases in the
     Partnership's share of income from partnerships.





                                     III-13
<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.   Cash and cash equivalents
          -------------------------

          Cash and cash equivalents consist of all money market funds, time and
     demand deposits, repurchase agreements and commercial paper with original
     maturities of three months or less.

     e.   Offering costs
          --------------

          The Partnership incurred certain costs in connection with the offering
     and selling of limited partner interests.  Such costs were recorded as a
     reduction of partners' capital when incurred.

     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 generally
     accepted accounting principles, 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 period.  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, 1999, as required by Statement of Financial Accounting
     Standards (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 purchase
     money notes), 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.

          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 notes, either individually or in the
     aggregate, due to:  (1) the lack of an active market for this type of
     financial instrument, (2) the variable nature of purchase money note
     interest payments as a result of fluctuating cash flow distributions

                                     III-14
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     received from the related Local Partnerships, and (3) the excessive costs
     associated with an independent appraisal of the purchase money notes.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

     a.   Due on investments in partnerships
          ----------------------------------

          As of December 31, 1999 and 1998, the Partnership held limited partner
     interests in 17 and 20 Local Partnerships, respectively, which were
     organized to develop, construct, own, maintain and operate rental apartment
     properties which provide housing principally to the elderly or to
     individuals and families of low or moderate income.  The remaining
     principal amounts due on investments in the Local Partnerships follow.

<TABLE>
<CAPTION>
                                               December 31,
                                        -------------------------
                                           1999          1998
                                        -----------   -----------
     <S>                                <C>           <C>
     Purchase money notes due in:
        1998                            $ 4,600,000   $ 6,980,000
        1999                                500,000     1,340,178
        2001                                     --     2,000,000
        2003                              2,248,747     5,024,004
                                        -----------   -----------
            Total                       $ 7,348,747   $15,344,182
                                        ===========   ===========
</TABLE>

          The purchase money notes have stated interest rates ranging from 9% to
     12%, certain of which are compounded annually.  The purchase money notes
     are payable in full upon the earliest of:  (1) sale or refinancing of the
     respective Local Partnership's rental property; (2) payment in full of the
     respective Local Partnership's permanent loan; or (3) maturity.  Purchase
     money notes in the aggregate principal amounts of $1,050,000 and $950,000
     matured on December 31, 1996 and December 31, 1997, respectively, and were
     paid off, at a discount, on October 5, 1998, as discussed below.  Purchase
     money notes in the principal amounts of $1,050,000 and $950,000 matured on
     December 31, 1996 and 1997, respectively, were extended to January 5, 2001,
     but were paid off, at a discount, on September 30, 1999, as discussed
     below.  Purchase money notes in the aggregate principal amount of
     $2,380,000 matured on January 1, 1998, and were written off on October 5,
     1999 when the related local partnership interests, held by the Partnership,
     were transferred to the noteholders in full satisfaction of the purchase
     money notes' principal and accrued interest.  Purchase money notes in the
     aggregate principal amount of $3,150,000 matured on June 1, 1998, and have
     not been paid or extended, as discussed below.  Purchase money notes in the
     original principal amounts of $4,600,000 and $1,927,500 matured on August
     31, 1998, were partially paid down, with the balances extended to August
     31, 2003, as discussed below.  A purchase money note in the principal
     amount of $1,450,000 matured on September 1, 1998, and  has not been paid
     or extended, as discussed below.  Purchase money notes in the aggregate
     principal amount of $840,178 matured on January 1, 1999 and were paid off,

                                     III-15
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     at a discount, on February 5, 1999.  Purchase money notes in the aggregate
     principal amount of $500,000 matured on January 1, 1999 and have not been
     paid or extended, as discussed below.

          The purchase money notes, which are nonrecourse to the Partnership,
     are generally secured by the Partnership's interest in the respective Local
     Partnerships.  There is no assurance that the underlying properties will
     have sufficient appreciation and equity to enable the Partnership to pay
     the purchase money notes' principal and accrued interest when due.  If a
     purchase money note is not paid in accordance with its terms, the
     Partnership will either have to renegotiate the terms of repayment or risk
     losing its partnership interest in the respective Local Partnership.  The
     Partnership's inability to pay certain of the purchase money note principal
     and accrued interest balances when due, and the resulting uncertainty
     regarding the Partnership's continued ownership interest in the related
     Local Partnerships, does not adversely impact the Partnership's financial
     condition because the purchase money notes are nonrecourse and secured
     solely by the Partnership's interest in the related Local Partnerships.
     Therefore, should the investment in any of the Local Partnerships with
     maturing purchase money notes not produce sufficient value to satisfy the
     related purchase money notes, the Partnership's exposure to loss is limited
     because the amount of the nonrecourse indebtedness of each of the maturing
     purchase money notes exceeds the carrying amount of the investment in, and
     advances to, each of the related Local Partnerships.  Thus, even a complete
     loss of the Partnership's interest in one of these Local Partnerships would
     not have a material adverse impact on the financial condition of the
     Partnership.  See further discussion of certain purchase money notes,
     below.

          The following chart presents information related to purchase money
     notes which have matured through December 31, 1999, and which remain unpaid
     or unextended as of March 30, 2000.  Excluded from the following chart are
     purchase money notes which matured through December 31, 1999, and which
     have been paid off, cancelled, or extended on or before March 30, 2000.
























                                     III-16
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>


                                                                                                     Carrying Amount
                                                                          Aggregate                  of Partnership's
                                               Aggregate                   Accrued                    Investment in
                                               Principal                  Interest                   and Advances to
                   Number of                    Balance                    Balance                   Underlying Local
                   Underlying                    as of                      as of                    Partnerships as
 Purchase Money      Local       Percentage     December    Percentage     December      Percentage     of December    Percentage
 Note Maturity    Partnerships    of Total      31, 1999     of Total      31, 1999       of Total       31, 1999       of Total
----------------  ------------   ----------   -----------   ----------   -------------   ----------  ----------------  ----------
<S>               <C>            <C>          <C>           <C>          <C>             <C>         <C>               <C>
2nd Quarter 1998       1               6%     $ 3,150,000         43%     $ 5,620,434         25%               --          --
3rd Quarter 1998       1               6%       1,450,000         20%       2,131,262          9%       $  710,881          74%
1st Quarter 1999       1               6%         500,000          7%       1,527,514          7%               --          --
                     ----          -----      -----------      -----      -----------      -----        ----------       -----
                       3              18%     $ 5,100,000         70%     $ 9,279,210         41%       $  710,881          74%
                     ====          =====      ===========      =====      ===========      =====        ==========       =====

Total, Local
  Partnerships        17             100%     $ 7,348,747        100%     $22,374,877        100%       $  966,378         100%
                     ====          =====      ===========      =====      ===========      =====        ==========       =====

</TABLE>

          The Managing General Partner is continuing to investigate possible
     alternatives to reduce the Partnership's debt obligations.  These
     alternatives include, among others, retaining the cash available for
     distribution to meet the purchase money note requirements, paying off
     certain purchase money notes at a discounted price, extending the due dates
     of certain purchase money notes, refinancing the respective properties'
     underlying debt or selling the underlying real estate and using the
     Partnership's share of the proceeds to pay or buy down certain purchase
     money note obligations.  Although the Managing General Partner has had some
     success applying these strategies in the past, the Managing General Partner
     cannot assure that these strategies will be successful in the future.  If
     the Managing General Partner is unable to negotiate an extension or
     discounted payoff, upon maturity of the purchase money notes, if the
     purchase money notes remain unpaid, the noteholders may have the right to
     foreclose on the Partnership's interest in the related Local Partnerships.
     In the event of a foreclosure, the excess of the nonrecourse indebtedness
     over the carrying amount of the Partnership's investment in the related
     Local Partnership would be deemed cancellation of indebtedness income which
     would be taxable to Limited Partners at a federal tax rate of up to 39.6%.
     Additionally, in the event of a foreclosure, the Partnership would lose its
     investment in the Local Partnership and, likewise, its share of any future
     cash flow distributed by the Local Partnership from rental operations,
     mortgage debt refinancings, or the sale of the real estate.  Of the 17
     Local Partnerships in which the Partnership is invested as of December 31,
     1999, the three Local Partnerships with associated purchase money notes
     which have matured and which remain unpaid or unextended as of March 30,
     2000, represent the following percentages of the Partnership's total
     distributions received from Local Partnerships and share of income from
     Local Partnerships.


                                     III-17
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>


                             Percentage of Total      Partnership's Share of
                            Distributions Received      Income (loss) from
     For the Years Ending   from Local Partnerships     Local Partnerships
     --------------------   -----------------------   ----------------------
     <S>                    <C>                       <C>
     December 31, 1999                1%                     $ 17,578
     December 31, 1998                1%                     $234,121

</TABLE>

          The Managing General Partner continues to address the maturity and
     impending maturity of its debt obligations and to seek strategies which
     will provide the most favorable outcome to the limited partners.  However,
     there can be no assurance that these strategies will be successful.

          Interest expense on the Partnership's purchase money notes for the
     years ended December 31, 1999 and 1998 was $1,532,386 and $3,729,871,
     respectively.  Amortization of discount on purchase money notes increased
     interest expense by $1,488,064 during 1998.  There was no amortization of
     discount on purchase money notes during 1999 as all discounts on purchase
     money notes were fully amortized as of December 31, 1998.  The accrued
     interest payable on the purchase money notes of $22,374,877 and $27,810,849
     as of December 31, 1999 and 1998, respectively, is due on the respective
     maturity dates of the purchase money notes or earlier, in some instances,
     if (and to the extent of a portion thereof) the related Local Partnership
     has distributable net cash flow, as defined in the relevant Local
     Partnership agreement.

                               Beech Hill I and II
                               -------------------

          The Partnership defaulted on its purchase money notes aggregating
     $2,380,000 related to Beech Hill Development Co. (Beech Hill I) and Beech
     Hill Development Co. II (Beech Hill II) on August 1, 1995 when the notes
     matured and were not paid.  On March 29, 1996, the noteholders agreed to
     extend the purchase money note due dates to January 1, 1998.  Under the
     agreement, the Partnership paid the noteholders of Beech Hill I and Beech
     Hill II all annual cash flow distributions received from the related Local
     Partnerships in excess of $5,000 and $2,500, respectively, to be applied
     against the notes.  The Partnership did not receive any cash flow
     distributions from Beech Hill I or Beech Hill II during 1999 or 1998.  Cash
     flow distributions of $0 and $30,694 were paid directly by Beech Hill I to
     the purchase money noteholders during the years ended December 31, 1999 and
     1998, respectively.  Cash flow distributions of $0 and $29,687 were paid
     directly by Beech Hill II to the purchase money noteholders during the
     years ended December 31, 1999 and 1998, respectively.  Annual cash flow
     distributions of $0 and $5,000 from Beech Hill I, and $0 and $2,500 from
     Beech Hill II, were received during the years ended December 31, 1999 and
     1998, respectively.

          Under the extension agreement, documents transferring the
     Partnership's interests in Beech Hill I and Beech Hill II to the
     noteholders were placed in escrow to be released to the noteholders upon a

                                     III-18
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     future default by the Partnership on the respective purchase money notes.
     On January 1, 1998, the Partnership defaulted on its purchase money notes
     related to Beech Hill I and Beech Hill II when the notes, as extended,
     matured and were not paid.  The default amount included principal and
     accrued interest of $1,480,000 and $1,687,578, respectively, for Beech Hill
     I and $900,000 and $1,072,113, respectively, for Beech Hill II.  On
     September 30, 1999, the noteholders instructed the escrow agent to release
     to them the transfer documents on October 5, 1999, and the escrow agent
     complied with those instructions.  Accordingly, the Partnership's interests
     in Beech Hill I and Beech Hill II were transferred to the noteholders on
     October 5, 1999.  As of that date, principal and accrued interest totaling
     $1,480,000 and $1,891,535, respectively, related to Beech Hill I and
     $900,000 and $1,185,119, respectively, related to Beech Hill II were due.

          The purchase money notes related to Beech Hill I and Beech Hill II are
     nonrecourse and secured solely by the Partnership's interests in the
     related Local Partnerships.  The release of the Partnership's purchase
     money note obligations as a result of the loss of ownership interest in the
     Local Partnerships resulted in extraordinary gain from extinguishment of
     debt of approximately $2.4 million and $1.5 million for Beech Hill I and
     Beech Hill II, respectively, during 1999.  The release of the Partnership's
     purchase money note obligations resulted in cancellation of indebtedness
     income of approximately $3.4 million and $2.1 million for Beech Hill I and
     Beech Hill II, respectively, for federal tax purposes in 1999.

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

          The Partnership defaulted on its two purchase money notes related to
     Chevy Chase Park, Limited (Chevy Chase) on December 31, 1996 when the notes
     matured and were not paid.  The aggregate default amount included principal
     and accrued interest of $2,100,000 and $3,553,912, respectively.  The
     Managing General Partner successfully negotiated an extension of one of the
     purchase money notes (First Chase Note) in the principal amount of
     $1,050,000 effective December 1, 1997.  In connection with the extension
     agreement, the Partnership made an interest payment to the noteholder.  The
     terms of the extension agreement extended the maturity date to January 2,
     2000.  On December 17, 1998, the Partnership exercised its right, pursuant
     to the extension agreement, to further extend the maturity date to January
     5, 2001 by making an additional payment, applied to accrued interest, to
     the noteholder.

          On February 10, 1998, the Partnership was served with a complaint by
     the two holders of the second purchase money note (Second Chase Note)
     filing suit against the Partnership, the Managing General Partner and
     C.R.H.C., Incorporated (CRHC), an affiliate of the Managing General
     Partner, for damages and seeking foreclosure on the Partnership's interest
     in the Local Partnership.  On July 29, 1998, the parties agreed to a
     settlement which involved a discounted payoff to the holders of the Second
     Chase Note, subject to the Partnership's satisfaction with the results of
     its due diligence.  On October 5, 1998, pursuant to such settlement
     agreement, the Partnership paid the holders of the Second Chase Note a
     discounted amount in full settlement of the Second Chase Note and the
     lawsuit.  In connection with this settlement, the local general partners
     withdrew from the Local Partnership, assigning their combined one percent
     interests (which were converted to a limited partner interest) in the Local
     Partnership to the Partnership, and the property management agent, which is

                                     III-19
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     an affiliate of the local general partners, was terminated effective April
     1, 1999.  CRHC is the sole remaining general partner of the Local
     Partnership.  Further, the Partnership received the interests of the local
     general partners, the holders of the Second Chase Note, and their
     respective affiliates in the First Chase Note, which is approximately
     10.808%.  On May 28, 1999, the Partnership filed suit against the holder of
     the First Chase Note, seeking payment of the Partnership's 10.808% share of
     payments made on the First Chase Note since October 1, 1997.  On September
     30, 1999, as part of the settlement of the litigation, the Partnership paid
     off, at a discount, the First Chase Note.  The discounted payoff resulted
     in extraordinary gain from extinguishment of debt of approximately $2.4
     million in 1999.  The discounted payoff will also result in cancellation of
     indebtedness income of approximately $2.4 million for federal tax purposes
     in 1999.

          On December 30, 1999, the Partnership was served with a complaint by
     certain alleged beneficiaries of the First Chase Note for, among other
     relief, their portion of payments made to First March Realty Corporation on
     the First Chase Note.  The Managing General Partner is vigorously defending
     its position that all such payments were made to the proper parties, and
     that it has no further responsibility or liability for payments made on the
     First Chase Note.

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

          The Partnership defaulted on its purchase money note related to Four
     Winds West Company Limited (Four Winds West) on January 1, 1999 when the
     note matured and was not paid.  The default amount included aggregate
     principal and accrued interest of $462,178 and $532,673, respectively.  On
     February 5, 1999, the Partnership paid off, at a discount, the purchase
     money note related to Four Winds West.  The discounted payoff resulted in
     extraordinary gain from extinguishment of debt of approximately $305,000 in
     1999.  The discounted payoff also resulted in cancellation of indebtedness
     income of approximately $305,000 for federal tax purposes in 1999.

                              Frenchman's Wharf II
                              --------------------

          The Partnership defaulted on its purchase money notes related to
     Frenchman's Wharf Associates II Limited Partnership (Frenchman's Wharf II)
     on June 1, 1998 when the notes matured and were not paid.  The default
     amount included principal and accrued interest of $3,150,000 and
     $5,071,731, respectively.  As of March 30, 2000, principal and accrued
     interest totaling $3,150,000 and $5,705,872, respectively, were due.  The
     purchase money notes were initially due to mature on June 1, 1988, but were
     extended to mature on June 1, 1998.  The Partnership requested another
     extension of the maturity date of the purchase money notes until May 2000,
     to be coterminous with the expiration of the Local Partnership's
     provisional workout agreement with HUD related to its mortgage loan.  In
     1996, HUD sold the mortgage loan to a third party lender.  The local
     managing general partner has had several conversations with the lender
     regarding the upcoming maturity of the workout.  There is no assurance
     these discussions will achieve a solution and it is possible the lender




                                     III-20
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     will initiate a foreclosure action.  As of March 30, 2000, the local
     managing general partner is still awaiting a response from the purchase
     money noteholders and the lender.

          Due to the uncertainties regarding the outcome of an extension of the
     maturity date of the purchase money note, and the possibility of a
     foreclosure proceeding on the Local Partnership's mortgage loan, there is
     no assurance that the Partnership will be able to retain its interest in
     Frenchman's Wharf II.  In the event of a foreclosure, the Partnership would
     also lose its share of any future cash flow distributed by the Local
     Partnership from rental operations, mortgage debt refinancings, or the sale
     of the real estate.  The uncertainty regarding the continued ownership of
     the Partnership's interest in Frenchman's Wharf II does not adversely
     impact the Partnership's financial condition, as discussed above.

                                    Princeton
                                    ---------

          The Partnership defaulted on its purchase money note related to
     Princeton Community Village Associates (Princeton) on January 1, 1999 when
     the note matured and was not paid.  The default amount included principal
     and accrued interest of $500,000 and $1,422,064, respectively.  As of March
     30, 2000, principal and accrued interest of $500,000 and $1,553,588,
     respectively, were due.

          On August 9, 1999, the noteholder filed a complaint seeking
     declaratory judgment that the Partnership has forfeited its interest in
     Princeton to the noteholders.  The parties are negotiating a settlement of
     the litigation.  There is no assurance that any agreement will be reached.
     The uncertainty regarding the continued ownership of the Partnership's
     interest in Princeton does not adversely impact the Partnership's financial
     condition, as discussed above.

            Rolling Green at Fall River and Rolling Green at Amherst
            --------------------------------------------------------

          The Partnership defaulted on its purchase money notes related to
     Roberts Fall River Associates (Rolling Green at Fall River) and Roberts
     Amherst Associates (Rolling Green at Amherst) on August 31, 1998 when the
     notes matured and were not paid.  The default amount included principal and
     accrued interest of $4,600,000 and $8,750,764, respectively, for Rolling
     Green at Fall River and $1,927,500 and $3,661,147, respectively, for
     Rolling Green at Amherst.  The Managing General Partner and the trustees
     representing the noteholders agreed to extend the maturity dates of the
     purchase money notes to February 28, 2001, subject to a further extension
     to August 31, 2003 if the Local Partnerships complete a refinancing of
     their mortgage loans, which refinancings have occurred.  However, the
     noteholders have the right to accelerate the maturity of the notes upon not
     less than one year's prior notice.  Accordingly, the purchase money notes
     for Rolling Green at Fall River and Rolling Green at Amherst presently
     mature on August 31, 2003, subject to the respective noteholder's right to
     accelerate the maturity.  As part of the agreement, the Partnership agreed
     that all refinancing mortgage loan proceeds payable to the Partnership by
     the respective Local Partnerships, as well as all net cash flow payable to
     the Partnership from the respective Local Partnerships in excess of $10,000
     per year, shall be applied to the balance of the respective purchase money
     notes, and further agreed to waive certain rights granted in the respective

                                     III-21
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     Local Partnerships' limited partnership agreements.  The mortgage loan on
     Rolling Green at Fall River was refinanced in March 1999; refinancing
     proceeds of $2,725,257 were used to pay down purchase money note principal
     and capitalized interest in March 1999.  The mortgage loan on Rolling Green
     at Amherst was refinanced in August 1998; refinancing proceeds of
     $1,503,496 were used to pay down purchase money note principal and
     capitalized interest in 1998.

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

          The Partnership defaulted on its purchase money note related to Troy
     Apartments Limited (Troy Manor) on January 1, 1999 when the note matured
     and was not paid.  The default amount included aggregate principal and
     accrued interest of $378,000 and $227,420, respectively.  On February 5,
     1999, the Partnership paid off, at a discount, the purchase money note
     related to Troy Manor.  The discounted payoff resulted in extraordinary
     gain from extinguishment of debt of approximately $220,000 in 1999.  The
     discounted payoff also resulted in cancellation of indebtedness income of
     approximately $220,000 for federal tax purposes in 1999.

                                    Westgate
                                    --------

          In June, 1998, the holder of the purchase money note related to
     Westgate Tower Limited Dividend Housing Associates (Westgate) accepted the
     Managing General Partner's offer to extend the maturity date of the
     purchase money note for five years from its scheduled maturity date of
     September 1, 1998.  However, the noteholder has since refused to execute
     the documentation formally extending the maturity date.  As of March 30,
     2000, principal and accrued interest of $1,450,000 and $2,163,440,
     respectively, were due.  In December, 1998, the noteholder's attorney
     notified the Managing General Partner of its position, which the Managing
     General Partner disputes, that the noteholder's prior agreement to extend
     the maturity date is not binding on the noteholder.  The noteholder has
     since agreed to execute the documentation formally extending the maturity
     date, but as of March 30, 2000, has not yet done so.  The Managing General
     Partner is prepared to vigorously defend its position that the agreement to
     extend the maturity date for five years is binding on the noteholder.
     There is no assurance that the parties will be able to settle this dispute
     or that the Partnership would prevail in any resulting litigation if a
     settlement is not reached.  Accordingly, there can be no assurance that the
     Partnership will be able to retain its interest in the Local Partnership.
     The uncertainty about the continued ownership of the Partnership's interest
     in the related Local Partnership does not adversely impact the
     Partnership's financial condition, as discussed above.

                                  Wexford Ridge
                                  -------------

          The Partnership defaulted on its three purchase money notes relating
     to Wexford Ridge Associates (Wexford Ridge) on December 31, 1997 when the
     notes matured and were not paid.  The aggregate default amount included
     principal and accrued interest of $1,900,000 and $3,478,549, respectively.
     The Managing General Partner successfully negotiated an extension on one of
     the purchase money notes (First Wexford Note) in the principal amount of
     $950,000 effective April 9, 1998; the First Wexford Note was paid off, at a

                                     III-22
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     discount, on September 30, 1999.  The discounted payoff resulted in
     extraordinary gain from extinguishment of debt of approximately $2.4
     million in 1999.  The discounted payoff will also result in cancellation of
     indebtedness income of approximately $2.4 million for federal tax purposes
     in 1999.

          On April 7, 1998, the Partnership was served with a complaint by the
     holder of the second and third purchase money notes (collectively, Second
     and Third Wexford Notes) filing suit against the Partnership, the Managing
     General Partner and C.R.H.C., Incorporated (CRHC), an affiliate of the
     Managing General Partner, for damages and seeking foreclosure on the
     Partnership's interest in the Local Partnership.  On July 29, 1998, the
     parties agreed to a settlement which involved a discounted payoff to the
     holder of the Second and Third Wexford Notes, subject to the Partnership's
     satisfaction with the results of its due diligence.  On October 5, 1998,
     pursuant to such settlement agreement, the Partnership paid the holder of
     the Second and Third Wexford Notes a discounted amount in full settlement
     of the Second and Third Wexford Notes and the lawsuit.  In connection with
     this settlement, the local general partner withdrew from the Local
     Partnership, assigning his one percent interest (which was converted to a
     limited partner interest) in the Local Partnership to the Partnership, and
     the property management agent, which is an affiliate of the local general
     partner, agreed to a termination of the property management agreement
     effective April 1, 1999.  CRHC is the sole remaining general partner of the
     Local Partnership.  Further, the Partnership received the interests of the
     local general partner, the holder of the Second and Third Wexford Notes,
     and their respective affiliates in the First Wexford Note, which is
     approximately 4.85%.  On May 28, 1999, the Partnership filed suit against
     the holder of the First Wexford Note, seeking payment of the Partnership's
     4.85% share of payments made on the First Wexford Note since October 1,
     1997.  On September 30, 1999, as part of the settlement of the litigation,
     the Partnership paid off, at a discount, the First Wexford Note (see
     above).

          On December 15, 1999, the Local Partnership sold its property.  See
     Note 2.d., below, for further information concerning the sale.

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

          The Partnership has a 92.99% to 98.99% interest in profits, losses and
     cash distributions (as restricted by various federal and state housing
     agencies) of each Local Partnership.  An affiliate of the Managing General
     Partner of the Partnership is also a general partner of each Local
     Partnership.  The Partnership received cash distributions from the rental
     operations and mortgage refinancings of the Local Partnerships totaling
     $4,156,788 and $7,672,840 during the years ended December 31, 1999 and
     1998, respectively.  As of December 31, 1999 and 1998, 12 and 14 of the
     Local Partnerships had surplus cash, as defined by their respective
     regulatory agencies, in the amounts of $1,327,052 and $2,092,142,
     respectively, which may be available for distribution in accordance with
     their respective regulatory agencies' regulations.

          The cash distributions to the Partnership from the operations of the
     rental properties may be limited by the agencies' regulations.  Such

                                     III-23
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     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.

          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 (1) all debts and liabilities of the
     Local Partnership and certain other items, (2) the Partnership's capital
     contributions plus certain specified amounts as outlined in each
     partnership agreement, and (3) certain special distributions to general
     partners and related entities of the Local Partnership.

     c.   Advances to Local Partnerships
          ------------------------------

          The advances, and accrued interest thereon, made to the Local
     Partnerships were as follows.

<TABLE>
<CAPTION>
                                                     December 31,
                                             --------------------------
                                                1999           1998
                                             -----------    -----------
     <S>                                     <C>            <C>
     Local Partnership
     -----------------
     Frenchman's Wharf II:
       Principal amount of funds advanced    $   324,410    $   324,410
       Accrued interest on advances              187,372        187,372

     Posada Vallarta:
       Principal amount of funds advanced        150,000        150,000
       Accrued interest on advances                   --             --
                                             -----------    -----------
         Total                               $   661,782    $   661,782
                                             ===========    ===========
</TABLE>

                              Frenchman's Wharf II
                              --------------------

          To cover operating deficits incurred in prior years for Frenchman's
     Wharf II, the Partnership advanced funds totaling $324,410 as of both
     December 31, 1999 and 1998.  No advances have been made to Frenchman's
     Wharf II since March 1987, and the Partnership does not expect to advance
     any additional funds to the Local Partnership.  These loans, together with
     accrued interest of $187,372 as of both December 31, 1999 and 1998, are
     payable from cash flow of Frenchman's Wharf II after payment of first
     mortgage debt service and after satisfaction by the Partnership of certain
     other interest obligations on the purchase money notes relating to the

                                     III-24
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     Local Partnership.  No interest has been accrued since 1992 due to the
     uncertainty of future collection.  There is no assurance that the Local
     Partnership, upon expiration of the workout of its mortgage loan, will be
     able to repay the loans in accordance with the terms thereof.  For
     financial reporting purposes, these loans have been reduced to zero by the
     Partnership as a result of losses at the Local Partnership level during
     prior years.

                           Posada Vallarta Apartments
                           --------------------------

          The Managing General Partner and the local managing general partner of
     Posada Associates Limited Partnership (Posada Vallarta Apartments)
     refinanced the property's mortgage loan on May 26, 1998.  In connection
     with such refinancing, the Partnership advanced the Local Partnership
     $450,000 for application and rate lock fees.  As of December 31, 1999,
     $300,000 of the advances had been repaid to the Partnership.  For financial
     reporting purposes, the remaining advance has been reduced to zero by the
     Partnership as a result of losses at the Local Partnership level.

     d.   Property matters
          ----------------

                             Arrowhead and Moorings
                             ----------------------

          On May 7, 1998, Arrowhead Apartments Associates Limited Partnership
     (Arrowhead) and Moorings Apartments Associates Limited Partnership
     (Moorings) closed on refinancings of their respective first mortgage loans.
     A portion of the proceeds were subsequently used to pay, at a discount,
     purchase money note obligations of the related Local Partnerships.  These
     discounted payoffs resulted in cancellation of indebtedness income for the
     Partnership's 1998 tax year.  Additionally, during the second and third
     quarters of 1998, the Partnership received $1,536,059 and $3,511,550 from
     Arrowhead and Moorings, respectively, from the net proceeds of the
     refinancings.

          The aggregate refinancing proceeds received by the Partnership
     exceeded the Partnership's remaining investments in Arrowhead and Moorings
     by approximately $1.4 million and $3.3 million, respectively, and have been
     included in share of income from partnerships in the 1998 statement of
     operations.

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

          The Managing General Partner and the local managing general partner
     are both exploring various options to refinance the U. S. Department of
     Housing and Urban Development (HUD) Section 236 interest rate subsidized
     mortgage loan related to Chevy Chase, or to enter the Mark-up-to-Market
     program.  The Managing General Partner and local managing general partner
     are awaiting HUD's analysis of the property and proposal for Mark-up-to-
     Market.  In the event that the property does not enter the Mark-up-to-
     Market program, consideration will be given to converting the property to
     market rate over the next 12 to 18 months.  There is no assurance that a
     refinancing of the mortgage loan will occur, that the property will enter
     the mark-up-to-market program, or that it will be converted to market rate.

                                     III-25
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                              Frenchman's Wharf II
                              --------------------

          The reports of the auditors on the financial statements of Frenchman's
     Wharf II for the years ended December 31, 1999 and 1998 indicated that
     substantial doubt exists about the ability of the Local Partnership to
     continue as a going concern due to the Local Partnership's default on its
     mortgage loan and the expiration of its Section 8 Rental Housing Assistance
     Payments (HAP) contract with HUD on November 30, 1999.  The contract
     subsequently was extended for another year.  The uncertainty about the
     Local Partnership's continued ownership of the property does not adversely
     impact the Partnership's financial condition, as discussed above.

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

          The 1983 construction loan related to Orangewood Plaza, a 40-unit
     apartment building in Orange Cove, California, was never formally converted
     to a permanent loan.  It is anticipated that this loan will be
     restructured, and that the restructuring may result in cancellation of
     indebtedness income to the Partnership in the amount of approximately
     $163,000 during 2000.  Additionally, the Partnership had pledged its
     interest in the Local Partnership as security on a promissory note, in the
     amount of $170,000, made by the Local Partnership.  The note, which matured
     on August 5, 1998, is currently in default.  The parties are currently
     negotiating a restructuring of this loan, which is anticipated to be
     formalized concurrent with the restructuring of the construction loan.
     There is no assurance that either restructuring will be formalized.
     Accordingly, there is no assurance that the Partnership will be able to
     retain its interest in Orangewood Plaza.  This uncertainty does not
     adversely impact the Partnership's financial condition, as discussed above.


                           Posada Vallarta Apartments
                           --------------------------

          The Managing General Partner and the local managing general partner of
     Posada Vallarta Apartments refinanced the property's mortgage loan on May
     26, 1998.  In connection with such refinancing, the Partnership advanced
     the Local Partnership $450,000 for application and rate lock fees.  As of
     December 31, 1999, and March 30, 2000, $300,000 of the advances had been
     repaid to the Partnership.  For financial reporting purposes, the remaining
     advance has been reduced to zero by the Partnership as a result of losses
     at the Local Partnership level.














                                     III-26
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                    Princeton
                                    ---------

          Princeton Community Village Associates (Princeton) has defaulted on
     its project subsidy loan, and the possibility exists that the local
     partnership could lose its ownership of the property should there be a
     foreclosure action.  The parties are presently negotiating an extension of
     the project subsidy loan.  The uncertainty about the Local Partnership's
     continued ownership of the property does not adversely impact the
     Partnership's financial condition, as discussed above.

                            Rolling Green at Amherst
                            ------------------------

          The mortgage loan on Rolling Green at Amherst was refinanced in August
     1998; refinancing proceeds of $1,503,496 were used to pay down purchase
     money note principal and capitalized interest in August 1998.  See the
     discussion above for additional information concerning this refinancing and
     pay down.  The Local Managing General Partner is negotiating a contract to
     sell Rolling Green at Amherst.  There is no assurance that a contract will
     be successfully negotiated or that a sale will take place.

                           Rolling Green at Fall River
                           ---------------------------

          The mortgage loan on Rolling Green at Fall River was refinanced in
     March 1999; refinancing proceeds of $2,725,257 were used to pay down
     purchase money note principal and capitalized interest in March 1999.  See
     the discussion above for additional information concerning this refinancing
     and pay down.  The Local Managing General Partner is negotiating a contract
     to sell Rolling Green at Fall River.  There is no assurance that a contract
     will be successfully negotiated or that a sale will take place.

                                  Wexford Ridge
                                  -------------

          On December 15, 1999, Wexford Ridge Associates (Wexford Ridge) sold
     its property.  The sale resulted in a financial statement gain of
     $3,070,636, an estimated federal tax gain of approximately $6.3 million, an
     net cash proceeds of $3,247,585 to the Partnership.

     e.   Affordable Housing Legislation
          ------------------------------

          Some of the rental properties owned by the Local Partnerships are
     dependent on the receipt of project-based Section 8 Rental Housing
     Assistance Payments (HAP) provided by the U.S. Department of Housing and
     Urban Development (HUD) pursuant to Section 8 HAP contracts.  Current
     legislation allows all expired Section 8 HAP contracts with rents at less
     than 100% of fair market rents to be renewed for one year.  Expiring
     Section 8 HAP contracts with rents that exceed 100% of fair market rents
     could be renewed for one year, but at rents reduced to 100% of fair market
     rents (Mark-to-Market).  All expiring Section 8 HAP contracts with rents
     exceeding comparable market rents, and properties with mortgage loans
     insured by the Federal Housing Administration (FHA), became subject to the
     Mark-to-Market legislation.


                                     III-27
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

          Mark-to-Market implementation will reduce rental income at properties
     which are currently subsidized at higher-than-market rental rates, and will
     therefore lower cash flow available to meet mortgage payments and operating
     expenses.  Each affected property may undergo debt restructuring according
     to terms determined by an individual property and operations evaluation.
     This may involve reducing the first mortgage loan balance to an amount
     supportable by the property, taking into account the property's operating
     expenses and reduced income.  The balance of the amount written down from
     the first mortgage loan will be converted to a non-performing but accruing
     (soft) second mortgage loan.

          The Section 8 HAP contracts for the following properties initially
     expired during the government's fiscal year 1998 or 1999 or will expire
     during 2000, and have been renewed as indicated.












































                                     III-28
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>

                                                   Units Authorized for           Original                   Renewed
                                    Number of     Rental Assistance Under   Expiration of Section 8    Expiration of Section 8
Property                           Rental Units         Section 8                HAP Contract               HAP Contract
--------                           ------------   -----------------------   -----------------------    -----------------------
<S>                                <C>            <C>                       <C>                        <C>
Chevy Chase                            232                  228                   03/23/98                  04/22/00 (1)
Country Place II                       120                   24                   08/29/00                    (1)
Four Winds West                         62                   62                   04/14/98                  10/14/00 (1)
Frenchman's Wharf II                   324                   31                   11/30/98                  11/30/00 (1)
Princeton Community Village            239                   26                   07/01/98                  10/01/24
Troy Manor                              50                   50                   10/29/99                  10/29/00 (1)
                                     -----                  ---
     Total                           1,027                  421
                                     =====                  ===
</TABLE>

(1)  The Managing General Partner expects that these Section 8 HAP Contracts
     will be renewed for one year upon expiration.

          With the uncertainty of continued project-based Section 8 subsidies
     for properties with expiring HAP contracts, there is no assurance that
     these rental properties will be able to maintain the rental income and
     occupancy levels necessary to pay operating costs and debt service.  As a
     result, it is not possible to predict the impact on the Local Partnerships'
     operations and the resulting impact on the Partnership's investments in the
     Local Partnerships at this time.  As of December 31, 1999, the
     Partnership's investments in and advances to Local Partnerships with
     Section 8 HAP contracts expiring in 2000 was $176,509.

          There is a new HUD-sponsored program generally referred to as "Mark-
     up-to-Market."  Under this program, properties with expiring Section 8
     contracts that are located in high-rent areas as defined by HUD are
     eligible for rent increases which would be necessary to bring Section 8
     rents in line with market rate rents.  For properties with subsidized FHA
     loans, the rents are adjusted to take into account the benefits the
     property is already receiving from the below-market interest rate by means
     of a HUD determined Interest Subsidy Adjustment Factor.  The purpose of
     this program is to incentivize owners of properties with expiring Section 8
     contracts not to convert these properties to market rate housing.

          In return for receiving market rate rents under Mark-up-to-Market, the
     property owner must enter into a five year conditional Section 8 contract
     with HUD, subject to the annual availability of funding by Congress.  In
     addition, property owners who enter into the Mark-up-to-Market program will
     receive a waiver from the cash flow restriction imposed on the property by
     the limited dividend limitation.

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

          Summarized financial information for the Local Partnerships at
     December 31, 1999 and 1998 and for the years ended December 31, 1999 and
     1998 follows.


                                     III-29
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                             COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                  -----------------------------
                                                                                      1999             1998
                                                                                  ------------     ------------
     <S>                                                                          <C>              <C>
     Rental property, at cost, net of accumulated
       depreciation of $67,535,066 and $71,480,347,
       respectively                                                               $ 52,767,596     $ 62,000,194
     Land                                                                            8,295,473        9,387,934
     Other assets                                                                   12,923,043       13,818,251
                                                                                  ------------     ------------
         Total assets                                                             $ 73,986,112     $ 85,206,379
                                                                                  ============     ============


     Mortgage notes payable                                                       $ 92,835,236     $ 98,088,051
     Other liabilities                                                              16,032,972       15,686,522
     Due to general partners                                                         4,507,399        4,507,399
                                                                                  ------------     ------------
         Total liabilities                                                         113,375,607      118,281,972

     Partners' deficit                                                             (39,389,495)     (33,075,593)
                                                                                  ------------     ------------
         Total liabilities and partners' deficit                                  $ 73,986,112     $ 85,206,379
                                                                                  ============     ============

</TABLE>



























                                     III-30
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                       COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                        For the years ended
                                                                                            December 31,
                                                                                  ------------------------------
                                                                                      1999             1998
                                                                                  ------------     ------------
     <S>                                                                          <C>              <C>
     Revenue:
       Rental                                                                     $ 26,446,608     $ 26,203,326
       Interest                                                                        330,644          512,900
       Other                                                                           569,069          837,182
                                                                                  ------------     ------------
         Total revenue                                                              27,346,321       27,553,408
                                                                                  ------------     ------------

     Expenses:
       Operating                                                                    16,559,620       17,375,844
       Interest                                                                      6,722,186        6,497,341
       Depreciation                                                                  4,523,878        4,772,182
       Amortization                                                                     99,202           82,463
                                                                                  ------------     ------------
         Total expenses                                                             27,904,886       28,727,830
                                                                                  ------------     ------------

     Loss before extraordinary gain from extinguishment
       of debt                                                                        (558,565)      (1,174,422)

     Extraordinary gain from extinguishment of debt                                  3,493,219        1,100,198
                                                                                  ------------     ------------

     Net income (loss)                                                            $  2,934,654     $    (74,224)
                                                                                  ============     ============

</TABLE>

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

          For federal income tax purposes, the Local Partnerships report on a
     basis whereby:  (1) certain revenue and the related assets are recorded
     when received rather than when earned; (2) certain costs are expensed when
     paid or incurred rather than capitalized and amortized over the period of
     benefit; and (3) a shorter life is used to compute depreciation on the
     property as permitted by Internal Revenue Service (IRS) Regulations.  These
     returns are subject to audit and, therefore, possible adjustment by the
     IRS.







                                     III-31
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

<TABLE>
<CAPTION>
                                                                                        For the years ended
                                                                                            December 31,
                                                                                  -------------------------------
                                                                                      1999             1998
                                                                                  ------------     ------------
     <S>                                                                          <C>              <C>
     Financial statement net income (loss)                                        $  2,934,654     $    (74,224)

     Adjustments:
       Additional book depreciation,
         net of depreciation on construction period expenses
         capitalized for financial statement purposes                                3,083,683          532,798

       Amortization for financial statement purposes
         not deducted for income tax purposes                                            3,154          171,181

       Difference in gain on disposition of investment in
         partnership                                                                 2,812,906               --

       Miscellaneous, net                                                              112,452          471,640
                                                                                  ------------     ------------
     Taxable income                                                               $  8,946,849     $  1,101,395
                                                                                  ============     ============

</TABLE>


3.   RELATED-PARTY TRANSACTIONS

     In accordance with 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 2% of the
Additional Limited Partners' capital contributions to the Partnership.  The
acquisition fee was capitalized and is being amortized over a 30-year period
using the straight-line method.

     In accordance with the terms of the Partnership Agreement, the Partnership
is obligated to reimburse the Managing General Partner for its direct expenses
in managing the Partnership.  For the years ended December 31, 1999 and 1998,
the Partnership paid $147,720 and $197,108, respectively, as direct
reimbursement of expenses incurred on behalf of the Partnership.  Such expenses
are included in the statements of operations as general and administrative
expenses.

     In addition, in accordance with the terms of the Partnership Agreement, the
Partnership is obligated to pay the Managing General Partner an annual incentive
management fee (the Management Fee), after all other expenses of the Partnership
are paid.  The amount of the Management Fee shall not exceed .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:

                                     III-32
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

3.   RELATED-PARTY TRANSACTIONS - Continued

     a.   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;

     b.   Second, after distributions to the limited partners in the amount of
          1% of the gross proceeds of the offering, the balance of such .25% of
          invested assets.

     For each of the years ended December 31, 1999 and 1998, the Partnership
paid the Managing General Partner a Management Fee of $249,996.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than 2% of the sales price of an investment in a Local Partnership or the
property it owns, payable under certain conditions upon the sale of an
investment in a Local Partnership or the property it owns.  The payment of the
fee is subject to certain restrictions, including the achievement of a certain
level of sales proceeds and making certain minimum distributions to limited
partners.  In accordance with the distribution provision of the Moorings local
partnership agreement, CRHC, a wholly-owned affiliate of the Managing General
Partner, was paid an additional incentive management fee of $331,073 on August
7, 1998.  The Managing General Partner was paid a disposition fee of $147,600 on
December 27, 1999, for the sale of Wexford Ridge.


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%.  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;












                                     III-33
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

4.   PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS - Continued

     (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 the Partnership Agreement;
      (iv) to the Additional 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 distributions other than prior distributions of sale
           and refinancing proceeds, plus (B) an additional amount equal to a
           cumulative non-compounded 6% return on each limited partner's
           capital contribution, reduced, but not below zero, by (1) an amount
           equal to 50% of the losses for tax purposes plus tax credits
           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 their services to the Partnership, in equal shares
           to certain general partners (or their designees), whether or not any
           is then a general partner, an aggregate fee of 1% 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 1% fee was not paid to the General Partners or their designees
           and,
    (viii) the remainder, 12% to the General Partners (or their assignees), 3%
           to the Special Limited Partner and 85% to the Initial and Additional
           Limited Partners (or their assignees).

     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 6% of the sales price
of the apartment properties.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than 2% of the sales price of an investment in a Local Partnership or the
property it owns, payable under certain conditions upon the sale of an
investment in a Local Partnership or the property it owns.  The payment of the
fee is subject to certain restrictions, including the achievement of a certain
level of sales proceeds and making certain minimum distributions to limited
partners.  In accordance with the distribution provision of the Moorings local
partnership agreement, CRHC, a wholly-owned affiliate of the Managing General
Partner, was paid an additional incentive management fee of $331,073 on August
7, 1998.  CRI was paid a disposition fee of $147,600 on December 27, 1999, for
the sale of Wexford Ridge.

     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

                                     III-34
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

4.   PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS - Continued

January 28, 2000, the Managing General Partner distributed $1,622,237 ($32.50
per additional limited partnership interest) to the Additional Limited Partners
from the proceeds of the sale of Wexford Ridge, to holders of record as of
December 15, 1999.  On October 29, 1999, the Managing General Partner
distributed $1,697,110 ($34.00 per additional limited partnership interest) to
the Additional Limited Partners, to holders of record as of October 1, 1999.  On
November 20, 1998, the Managing General Partner distributed $499,350 ($10.00 per
additional limited partnership interest) to the Additional Limited Partners from
the proceeds of the refinancing of Arrowhead and Moorings mortgage loans, to
holders of record as of September 30, 1998.

     As defined in the Partnership Agreement, after the payment of distributions
to Additional Limited Partners as 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, 1999 and 1998.  The
Managing General Partner intends to reserve all of the Partnership's remaining
undistributed cash for the possible repayment, prepayment or retirement of the
Partnership's outstanding purchase money notes related to the Local
Partnerships.


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

     For federal income tax purposes, the Partnership reports on a basis
whereby:  (1) certain expenses are amortized rather than expensed when incurred;
(2) certain costs are amortized over a shorter period for tax purposes, as
permitted by IRS Regulations, and (3) certain costs are amortized over a longer
period for tax purposes.  The Partnership records its share of 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.
























                                     III-35
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

5.   RECONCILIATION OF THE PARTNERSHIP'S FINANCIAL STATEMENT NET INCOME
          TO TAXABLE INCOME (LOSS) - Continued

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

<TABLE>
<CAPTION>
                                                                                                   For the years ended
                                                                                                       December 31,
                                                                                             ----------------------------
                                                                                                 1999            1998
                                                                                             ------------    ------------
<S>                                                                                          <C>             <C>
Financial statement net income                                                               $ 13,078,499    $  3,009,180

Adjustments:
  Differences between taxable income (loss) and financial
    statement net income related to the Partnership's
    equity in the Local Partnerships' income or losses                                          7,610,814      (5,264,715)

  Costs amortized over a shorter period for income
    tax purposes                                                                                   40,804         (16,748)

  Effect of amortization of discount on purchase money notes
    for financial statement purposes                                                             (268,797)      1,071,687
                                                                                             ------------    ------------
Taxable income (loss)                                                                        $ 20,461,320    $ (1,200,596)
                                                                                             ============    ============
</TABLE>






























                                     III-36
<PAGE>


                                  EXHIBIT INDEX
                                  -------------


Exhibit                                         Method of Filing
-------                                   -----------------------------

27        Financial Data Schedule         Filed herewith electronically






















































                                     III-37