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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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


                                    FORM 10-K

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



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

                   For the fiscal year ended December 31, 2008

                                       or

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

                         COMMISSION FILE NUMBER 0-11973

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

                           CAPITAL REALTY INVESTORS-II
                               LIMITED PARTNERSHIP


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

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200

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

                        UNITS OF LIMITED PARTNER INTEREST

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



Indicate by check mark if the  Registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.
Yes      |_|      No       |X|

Indicate  by  check  mark if the  Registrant  is not  required  to file  reports
pursuant to Section 13 or 15(d) of the Act.
Yes      |_|      No       |X|

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes      |X|      No       |_|

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K |X|

Indicate by check mark whether the Registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer   |_|      Accelerated filer              |_|
Non-accelerated filer     |_|      Smaller reporting company      |X|

Indicate by check mark whether the  Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes      |_|     No       |X|

The units of limited  partner  interest of the  Registrant are not traded in any
market.  Therefore,  the units of limited partner  interest had neither a market
selling price nor an average bid or asked price.

                       DOCUMENTS INCORPORATED BY REFERENCE

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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                         2008 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS



                                                                           Page

                                     PART I

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


                                     PART II

Item 5.   Market for the Registrant's Partnership Interests
            and Related Partnership Matters .............................. II-1
Item 7.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations..................................... II-2
Item 8.   Financial Statements............................................ II-4
Item 9.   Changes In and Disagreements With Accountants
            on Accounting and Financial Disclosure........................ II-5
Item 9A.  Controls and Procedures......................................... II-5
Item 9B.  Other Information............................................... II-5


                                    PART III

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


                                     PART IV

Item 15.  Exhibits and Financial Statements............................... IV-1

<PAGE>
                                     PART I
                                     ------

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

     Capital Realty  Investors-II  Limited  Partnership  (the  Partnership) is a
limited  partnership which was formed under the Maryland Revised Uniform Limited
Partnership  Act on March 23, 1983. On May 6, 1983,  the  Partnership  commenced
offering 50,000 units of additional  limited partner  interest  through a public
offering managed by Merrill Lynch, Pierce, Fenner and Smith,  Incorporated.  The
Partnership  closed  the  offering  on  June  20,  1983,  when it  became  fully
subscribed.  As of December 31, 2008, 85 units of limited  partner  interest had
been abandoned.

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

     The  Partnership  was  formed  to  invest  in  real  estate,  which  is the
Partnership's  principal  business  activity,  by acquiring and holding  limited
partner interests in limited partnerships (Local Partnerships).  The Partnership
originally made investments in 22 Local  Partnerships.  As of December 31, 2008,
the  Partnership  retains its  investment  in one Local  Partnership.  The Local
Partnership owns a state  government-assisted  apartment complex, which provides
housing  principally to the elderly and/or to individuals and families of low or
moderate income. The original  objectives of these investments,  not necessarily
in order of importance, were to:

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

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

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

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

                                       I-1

<PAGE>
                                     PART I
                                     ------

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

     As a result of its investment in the Local  Partnerships,  the  Partnership
became the  principal  limited  partner in 22 (one  remaining as of December 31,
2008)  Local  Partnerships.  As  a  limited  partner,  the  Partnership's  legal
liability  for  obligations  of  the  Local   Partnerships  is  limited  to  its
investment. An affiliate of the Managing General Partner of the Partnership is a
general  partner  in the one  remaining  Local  Partnership.  Affiliates  of the
Managing  General Partner may operate other apartment  complexes which may be in
competition for eligible tenants with the Local Partnership's apartment complex.

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

     A schedule of the apartment complex owned by the Local Partnership in which
the Partnership has an investment as of December 31, 2008, follows.

<TABLE>
<CAPTION>

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


                                                                                                   Units
                             Mortgage                                                          Authorized for     Expiration
 Name and Location          Payable at        Financed and/or Insured            Number of       Low Income           of
of Apartment Complex       12/31/08 (2)       and/or Subsidized Under           Rental Units     Subsidies       HAP Contract
--------------------       ------------    -----------------------------        ------------   --------------    -------------
<S>                        <C>             <C>                                  <C>            <C>               <C>
Westgate Tower Apts.        $1,045,050     Michigan State Housing Develop-           148              0                 --
 Westland, MI                               ment Authority/236
                            ----------                                               ---             --
Totals (1 Property)         $1,045,050                                               148              0
                            ==========                                               ===             ==

</TABLE>

<TABLE>
<CAPTION>
                                                                                         Average Effective Annual
                                       Units Occupied As                                   Rental Per Unit
                                   Percentage of Total Units                             for the Years Ended
                                      As of December 31,                                     December 31,
 Name and Location           ------------------------------------      ------------------------------------------------------
of Apartment Complex         2008    2007     2006   2005    2004        2008        2007        2006        2005       2004
--------------------         ----    ----     ----   ----    ----      -------     -------     -------     -------    -------
<S>                          <C>     <C>      <C>    <C>     <C>       <C>         <C>         <C>         <C>        <C>
Westgate Tower Apts.          91%     95%      92%    95%     96%      $ 4,623     $ 4,743     $ 4,597     $ 4,498    $ 4,412
 Westland, MI
                             ---     ---      ---    ---     ---       -------     -------     -------     -------    -------
Totals (1 Property) (1)       91%     95%      92%    95%     96%      $ 4,623     $ 4,743     $ 4,597     $ 4,498    $ 4,412
                             ===     ===      ===    ===     ===       =======     =======     =======     =======    =======

</TABLE>

     (1)  The property is a multifamily  housing complex. No single tenant rents
          10% or more of the rentable  square  footage.  Residential  leases are
          typically one year or less in length,  with varying  expiration dates,
          and substantially all rentable space is for residential purposes.
     (2)  The amount  provided is the balance of the first mortgage loan payable
          by the Local Partnership as of December 31, 2008.

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

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

                                       I-2

<PAGE>
                                     PART I
                                     ------

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

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


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

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


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

     No matters were  submitted to a vote of security  holders during the fourth
quarter of 2008.

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

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

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

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

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


                                       I-3

<PAGE>
                                     PART I
                                     ------


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

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

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

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

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

</TABLE>

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

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

                                       I-4

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


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

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

          On October 29,  2008,  Peachtree  Partners  (Peachtree)  initiated  an
          unregistered  tender  offer to purchase up to 4.9% of the  outstanding
          Units  in the  Partnership  at a price  of $31 per  Unit.  Aside  from
          Limited Partner  interests held by its affiliates in the  Partnership,
          Peachtree is unaffiliated with the Partnership or the Managing General
          Partner.  The price offered was determined solely at the discretion of
          Peachtree and does not necessarily  represent the fair market value of
          each  Unit.  In  its  Press  Release,  the  Managing  General  Partner
          recommended that Limited Partners reject the unregistered tender offer
          because it viewed the offer price as inadequate.

          On or about  January 28, 2009,  Peachtree  initiated  an  unregistered
          tender  offer to purchase up to 4.9% of the  outstanding  Units in the
          Partnership  at a price of $35 per Unit.  Aside from  Limited  Partner
          interests  held by its  affiliates  in the  Partnership,  Peachtree is
          unaffiliated with the Partnership or the Managing General Partner. The
          price offered was determined solely at the discretion of Peachtree and
          does not necessarily  represent the fair market value of each Unit. In
          its Press  Release,  the Managing  General  partner  recommended  that
          Limited  Partners  reject that  unregistered  tender offer  because it
          viewed the offer price as inadequate.

     (b)  As of March  26,  2009,  there  were  approximately  2,959  registered
          holders of Units in the Partnership.

     (c)  No distributions were declared in the years 2008 and 2007.



                                      II-1

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


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS
          -----------------------------------

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

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

     The  Partnership has disclosed its selection and application of significant
accounting  policies in Note 1 of the notes to financial  statements included in
this annual report on Form 10-K at December 31, 2008. The  Partnership  accounts
for its remaining investment in partnership (Local Partnership) using the equity
method because the Partnership is a limited partner in the Local Partnership. As
such,  the  Partnership  has no control over the  selection and  application  of
accounting  policies,  or  the  use of  estimates,  by  the  Local  Partnership.
Environmental and operational trends, events and uncertainties that might affect
the  property  owned by the  Local  Partnership  would  not  necessarily  have a
significant  impact on the  Partnership's  application  of the equity  method of
accounting.

                                     General
                                     -------

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

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

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

                                      II-2

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


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

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

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

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

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

     As of December 31, 2008, the Partnership had approximately  2,966 investors
who held a total of 49,910 units of additional  limited  partner  interest which
were  originally sold for the aggregate  amount of $49,910,000.  The Partnership
originally made  investments in 22 Local  Partnerships,  of which one remains at
December 31, 2008. The Partnership's liquidity, with unrestricted cash resources
of  $4,137,701  as of December 31, 2008,  is expected to be adequate to meet its
current and anticipated  operating cash needs. As of March 26, 2009,  there were
no material commitments for capital expenditures.

     During 2008 and 2007, the Partnership  received no cash  distributions from
the remaining Local Partnership.

     The  Partnership's  remaining  obligation with respect to its investment in
Westgate Tower Limited Dividend Housing Association (Westgate), in the form of a
nonrecourse purchase money note which matured September 1, 2003, has a principal
balance of  $1,400,000  plus accrued  interest of  $3,256,262 as of December 31,
2008,  and is payable in full upon the earliest of: (i) sale or  refinancing  of
the respective Local Partnership's rental property;  (ii) payment in full of the
respective Local Partnership's permanent loan; or (iii) maturity.

     The  purchase  money note,  which is  nonrecourse  to the  Partnership,  is
secured by the Partnership's  interest in the Westgate Local Partnership,  which
owns Westgate Tower Apartments. The underlying property does not have sufficient
appreciation  and equity to enable the  Partnership  to pay the  purchase  money
note's  principal and accrued  interest.  The Managing  General  Partner and the
representatives of the purchase money noteholders have signed a contract for the
assignment  of the  Partnership's  interest in Westgate in  satisfaction  of the

                                      II-3

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


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

purchase money note. The gain on this assignment would be taxed at a federal tax
rate of up to 35  percent.  There can be no  assurance  that a  transfer  of the
Partnership's interest in Westgate will occur.

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

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the year ended  December 31, 2008,  existing cash resources were adequate to
support  net cash  used in  operating  activities.  Cash  and  cash  equivalents
decreased  $450,410  during  2008,  primarily  due to net cash used in operating
activities.  The Partnership does not expect to receive  distributions  from the
remaining Local Partnership in future years.

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

2008 Versus 2007
----------------

     The Partnership's net loss for the year ended December 31, 2008,  increased
compared to 2007, primarily due to decreased interest revenue,  partially offset
by increased  share of income from  partnerships  and lower  professional  fees.
Interest  revenue  decreased due to lower cash and cash equivalent  balances and
interest rates in 2008. Share of income from  partnerships  increased  primarily
due to lower operating expenses at Westgate.  Professional fees are lower due to
a  reduction  in audit  fee  expense  associated  with the  timing  of  services
provided.

                                    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.

     The rental revenues of the  Partnership's  remaining  property for the five
years ended December 31, 2008, follow. Rental revenue amounts have been adjusted
to reflect property sales and interests transferred in 2008 and in prior years.

<TABLE>
<CAPTION>

                                                            For the years ended December 31,
                           ------------------------------------------------------------------------------------------------
                             2008                  2007                  2006                  2005                  2004
                           --------              --------              --------              --------              --------
<S>                        <C>         <C>       <C>           <C>     <C>           <C>     <C>          <C>      <C>
Rental Revenue             $684,189              $701,989              $680,348              $665,740              $652,980

Annual Percentage
  (Decrease) increase                 (2.5%)                   3.2%                  2.2%                  2.0%

</TABLE>


ITEM 8. FINANCIAL STATEMENTS
        --------------------

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

                                      II-4

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


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
        ---------------------------------------------
          ON ACCOUNTING AND FINANCIAL DISCLOSURE
          --------------------------------------

     None.


ITEM 9A. CONTROLS AND PROCEDURES
         -----------------------

     In January 2009,  representatives  of the Managing  General  Partner of the
Partnership  carried out an  evaluation of the  effectiveness  of the design and
operation of the Partnership's  disclosure controls and procedures,  pursuant to
Exchange Act Rules  13a-15 and 15d-15.  The  Managing  General  Partner does not
expect that the  Partnership's  disclosure  controls and procedures will prevent
all error and all fraud.  A control  system,  no matter how well  conceived  and
operated,  can provide only  reasonable  assurance  that the  objectives  of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur  because  of simple  error or  mistake.  The  design of any  system of
controls also is based in part upon certain  assumptions about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all  potential  future  conditions.  Over time,
controls may become inadequate  because of changes in conditions,  or the degree
of compliance  with the policies or procedures may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may  occur and not be  detected.  Based on such  evaluation,  our
principal  executive officer and principal financial officer have concluded that
as of December 31, 2008, our disclosure  controls and procedures  were effective
to ensure that (i) the information required to be disclosed by us in the reports
filed or submitted by us under the Securities  Exchange Act of 1934, as amended,
was  recorded,  processed,  summarized  or  reported  within  the  time  periods
specified in the SEC's rules and forms and (ii) such information was accumulated
and communicated to management,  including our principal  executive  officer and
principal  financial  officer,  to allow  timely  decisions  regarding  required
disclosure.  In  addition,  there  have  been  no  significant  changes  in  the
Partnership's internal control over financial reporting that occurred during the
Partnership's  most recent fiscal  quarter that has materially  affected,  or is
reasonably likely to materially affect, the Partnership's  internal control over
financial reporting.


ITEM 9B. OTHER INFORMATION
         -----------------

     There has not been any information  required to be disclosed in a report on
Form 8-K during the quarter ended December 31, 2008,  but not reported,  whether
or not otherwise required by this Form 10-K at December 31, 2008.

     Certain  states may assert claims  against the  Partnership  for failure to
withhold and remit state income tax on operating  profit or where the sale(s) of
property in which the Partnership was invested failed to produce sufficient cash
proceeds  with  which to pay the state tax and/or to pay  statutory  partnership
filing fees. The  Partnership is unable to quantify the amount of such potential
claims at this time. The Partnership has consistently  advised its Partners that
they  should  consult  with their tax  advisors  as to the  necessity  of filing
non-resident  returns in such states with  respect to their  proportional  taxes
due.

                                      II-5

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


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
         --------------------------------------------------

     (a)  and (b)

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

     (a)  and (b)

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

William B. Dockser, 72, has been the Chairman of the Board and a Director of CRI
since 1974.  Prior to forming  CRI, he served as  President of Kaufman and Broad
Asset Management,  Inc., an affiliate of Kaufman and Broad,  Inc., which managed
publicly held limited  partnerships created to invest in low and moderate income
multifamily apartment properties.  Prior to joining Kaufman and Broad, he served
in various positions at HUD,  culminating in the post of Deputy FHA Commissioner
and Deputy Assistant Secretary for Housing Production and Mortgage Credit, where
he was responsible for all federally insured housing production programs. Before
coming to the Washington,  D.C., area, Mr. Dockser was a practicing  attorney in
Boston and served as a special  Assistant  Attorney General for the Commonwealth
of  Massachusetts.  He holds a Bachelor of Laws degree from Yale  University Law
School and a Bachelor of Arts degree, cum laude, from Harvard University.

H. William Willoughby,  62, has been President,  Secretary and a Director of CRI
since January 1990,  and was Senior  Executive Vice  President,  Secretary and a
Director of CRI from 1974 to 1989.  Effective May 7, 2005, he assumed the duties
of Principal  Financial Officer and Principal  Accounting  Officer of CRI. He is
principally  responsible for the financial  management of CRI and its associated
partnerships.  Prior to joining CRI in 1974,  he was Vice  President  of Shelter
Corporation of America and a number of its subsidiaries dealing principally with
real  estate   development   and  equity   financing.   Before  joining  Shelter
Corporation,  he was a senior tax accountant with Arthur Andersen & Co. He holds
a Juris Doctor degree, a Master of Business Administration degree and a Bachelor
of  Science  degree in  Business  Administration  from the  University  of South
Dakota.

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

     (d)  Involvement in certain legal proceedings.

          None.

                                      III-1

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


ITEM 11. EXECUTIVE COMPENSATION
         ----------------------

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

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


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         -----------------------------------------------
           AND MANAGEMENT
           --------------

     (a)  Security ownership of certain beneficial owners.

          The following  table sets forth  certain  information  concerning  any
          person  (including any "group") who is known by the  Partnership to be
          the  beneficial  owner of more than five  percent  of the  issued  and
          outstanding units of additional  limited partner interest (Units),  at
          March 26, 2009.

<TABLE>
<CAPTION>
                                                                      % of Total
              Name and Address            Amount and Nature          Units Issued
            of Beneficial Owner        of Beneficial Ownership      and Outstanding
          -------------------------    -----------------------     ----------------
          <S>                          <C>                         <C>
          Equity Resource,                   10,516 Units                21.1%
            Investments, LLC
          1280 Massachusetts Avenue
          4th Floor
          Cambridge, MA 02138
</TABLE>

     (b)  Security ownership of management.

          The following  table sets forth  certain  information  concerning  all
          Units  beneficially  owned, as of March 26, 2009, by each director and
          by all  directors  and  officers  as a group of the  Managing  General
          Partner of the Partnership.

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

</TABLE>

     (c)  Changes in control.

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

                                      III-2

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


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------

     (a) and (b)

          Transactions with management and others.

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

     (c) Certain business relationships.

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

     (d) Transactions with promoters.

          Not applicable.


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

     During the years ended December 31, 2008 and 2007, the Partnership retained
Grant Thornton LLP to provide services as follows.


                                            Year Ended December 31,
                                         ----------------------------
                                           2008                2007
                                         --------            --------

         Audit fees                      $ 74,200            $107,500
         Audit-related fees                    --                  --
         Tax fees (1)                      12,500              29,020
         All other fees                        --                  --
                                         --------            --------
             Total                       $ 86,700            $136,520
                                         ========            ========


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


     The Partnership has no directors or officers. The Board of Directors of the
Managing General Partner of the Partnership, serving as the audit committee, has
approved in advance  100% of the fees paid to, and  services  provided by, Grant
Thornton LLP. Prior to approving  Grant  Thornton LLP's  providing any non-audit
services,  the  Board  of  Directors  of the  Managing  General  Partner  of the
Partnership   would  assess  whether  the  provision  of  those  services  would
compromise  Grant  Thornton  LLP's  independence.  Grant  Thornton  LLP provided
partnership tax return preparation  services during the years ended December 31,
2008 and  2007,  which  services  it was  determined  did not  compromise  Grant
Thornton LLP's independence.


                                      III-3

<PAGE>
                                     PART IV
                                     -------


ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS
         ---------------------------------

1.   Financial Statements

     a.   The following documents are included as part of this report:

          (1)  Financial Statements

               Report of Independent Registered Public Accounting Firm
               Balance Sheets
               Statements of Operations
               Statements of Changes in Partners' (Deficit) Capital
               Statements of Cash Flows
               Notes to Financial Statements

          (2)  Financial Statement Schedules

               None.

          (3)  Exhibits

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

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

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

               Exhibit No. 3 - Articles of Incorporation and bylaws.

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

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

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

               Exhibit No. 10 - Material Contracts.

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

                                      IV-1

<PAGE>
                                     PART IV
                                     -------


ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS - Continued
         ---------------------------------

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

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

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

         Exhibit No. 99   - Additional Exhibits.

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



                                      IV-2

<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 26, 2009                         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 26, 2009                         by:  /s/ H. William Willoughby
--------------                              ------------------------------------
DATE                                        H. William Willoughby,
                                            Director, President, Secretary,
                                              Principal Financial Officer and
                                              Principal Account Officer


                                      IV-3

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          INDEX TO FINANCIAL STATEMENTS

                                                                           Page
                                                                           ----
Financial Statements of Capital Realty Investors-II Limited Partnership

Report of Independent Registered Public Accounting Firm................... IV-5
Balance Sheets as of December 31, 2008 and 2007........................... IV-6
Statements of Operations for the Years Ended
  December 31, 2008, 2007 and 2006........................................ IV-7
Statements of Changes in Partners' (Deficit) Capital for the Years
  ended December 31, 2008, 2007 and 2006.................................. IV-8
Statements of Cash Flows for the Years Ended
  December 31, 2008, 2007 and 2006........................................ IV-9
Notes to Financial Statements............................................. IV-10

                                      IV-4

<PAGE>

Report of Independent Registered Public Accounting Firm


The Partners
Capital Realty Investors-II Limited Partnership.


We have audited the accompanying  balance sheets of Capital Realty  Investors-II
Limited  Partnership (a Maryland limited  partnership)  (the  Partnership) as of
December 31, 2008 and 2007 and the related  statements of operations,  partners'
(deficit)  capital,  and cash  flows for each of the three  years in the  period
ended December 31, 2008. These financial  statements are the  responsibility  of
the  Partnership's  management.  Our  responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Capital Realty  Investors-II
Limited  Partnership  as of December  31, 2008 and 2007,  and the results of its
operations,  and its cash flows for each of the three years in the period  ended
December 31, 2008, in conformity with accounting  principles  generally accepted
in the United States of America.

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


/s/ Grant Thornton LLP


McLean, Virginia
March 26, 2009

                                      IV-5

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP


                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                      ----------------------------
                                                                                          2008            2007
                                                                                      ------------    ------------
<S>                                                                                   <C>             <C>
Investment in partnership held for sale or transfer ...............................   $    436,484    $    392,458
Cash and cash equivalents .........................................................      4,137,701       4,588,111
Other assets ......................................................................          4,559          31,741
                                                                                      ------------    ------------

   Total assets ...................................................................   $  4,578,744    $  5,012,310
                                                                                      ============    ============




                                                  LIABILITIES AND PARTNERS' CAPITAL



Due on investment in partnership ..................................................   $  1,400,000    $  1,400,000
Accrued interest payable ..........................................................      3,256,262       3,130,262
Accounts payable and accrued expenses .............................................         64,927         149,718
                                                                                      ------------    ------------

   Total liabilities ..............................................................      4,721,189       4,679,980
                                                                                      ------------    ------------

Commitments and contingencies

Partners' (deficit) capital:

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

                                                                                        50,017,000      50,017,000

  Less:
    Accumulated distributions to partners .........................................    (34,752,903)    (34,752,903)
    Offering costs ................................................................     (5,278,980)     (5,278,980)
    Accumulated losses ............................................................    (10,127,562)     (9,652,787)
                                                                                      ------------    ------------

      Total partners' (deficit) capital ...........................................       (142,445)        332,330
                                                                                      ------------    ------------

      Total liabilities and partners' (deficit) capital ...........................   $  4,578,744    $  5,012,310
                                                                                      ============    ============
</TABLE>


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

                                      IV-6

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                               For the years ended
                                                                                   December 31,
                                                                     -----------------------------------------
                                                                        2008           2007           2006
                                                                     -----------    -----------    -----------
<S>                                                                  <C>            <C>            <C>
Share of income (loss) from partnerships .........................   $    44,026    $      (185)   $  (118,017)
                                                                     -----------    -----------    -----------

Other revenue and expenses:

  Revenue:
    Interest and other ...........................................       125,469        249,851        270,649
                                                                     -----------    -----------    -----------

                                                                         125,469        249,851        270,649
                                                                     -----------    -----------    -----------

  Expenses:
    Management fee ...............................................       249,996        249,996        249,996
    General and administrative ...................................       213,252        214,705        232,413
    Interest .....................................................       126,000        126,000        126,000
    Professional fees ............................................        55,022        143,306        166,330
                                                                     -----------    -----------    -----------

                                                                         644,270        734,007        774,739
                                                                     -----------    -----------    -----------

      Total other revenue and expenses ...........................      (518,801)      (484,156)      (504,090)
                                                                     -----------    -----------    -----------

Loss before gain on disposition of investment in partnerships ....      (474,775)      (484,341)      (622,107)

Gain on disposition of investment in partnerships ................          --           12,476         90,932
                                                                     -----------    -----------    -----------

Net loss .........................................................   $  (474,775)   $  (471,865)   $  (531,175)
                                                                     ===========    ===========    ===========


Net loss allocated to General Partners (1.51%) ...................   $    (7,169)   $    (7,125)   $    (8,021)
                                                                     ===========    ===========    ===========

Net loss allocated to Initial and Special Limited Partners (1.49%)   $    (7,074)   $    (7,031)   $    (7,914)
                                                                     ===========    ===========    ===========

Net loss allocated to Additional Limited Partners (97%) ..........   $  (460,532)   $  (457,709)   $  (515,240)
                                                                     ===========    ===========    ===========

Net loss per unit of Additional Limited Partner Interest,
  based on 49,910 units outstanding ..............................   $     (9.23)   $     (9.17)   $    (10.32)
                                                                     ===========    ===========    ===========
</TABLE>

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

                                      IV-7

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

              STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL


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

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

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

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

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

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

  Net loss ...................................        (7,169)        (7,074)      (460,532)      (474,775)
                                                 -----------    -----------    -----------    -----------

Partners' (deficit) capital, December 31, 2008   $  (332,352)   $  (273,244)   $   463,151    $  (142,445)
                                                 ===========    ===========    ===========    ===========
</TABLE>


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

                                      IV-8

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           For the years ended
                                                                                               December 31,
                                                                                ------------------------------------------
                                                                                     2008          2007          2006
                                                                                ------------   ------------   ------------
<S>                                                                             <C>            <C>            <C>
Cash flows from operating activities:
  Net loss ..................................................................   $  (474,775)   $  (471,865)   $  (531,175)

  Adjustments to reconcile net loss to net cash used in operating activities:
    Share of (income) loss from partnerships ................................       (44,026)           185        118,017
    (Gain) loss on disposition of investment in partnerships ................          --          (12,476)        12,567
    Additional gain on disposition of investment in partnerships ............          --             --         (103,499)

    Changes in assets and liabilities:
      Decrease (increase) in other assets ...................................        27,182         86,065       (115,915)
      Increase in accrued interest payable ..................................       126,000        126,000        126,000
      (Decrease) increase in accounts payable and accrued expenses ..........       (84,791)         1,869          7,426
      Increase in accrued interest receivable on advances ...................          --             --           (1,250)
                                                                                -----------    -----------    -----------

        Net cash used in operating activities ...............................      (450,410)      (270,222)      (487,829)
                                                                                -----------    -----------    -----------


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


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


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

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


Net (decrease) increase in cash and cash equivalents ........................      (450,410)      (257,746)       198,137

Cash and cash equivalents, beginning of year ................................     4,588,111      4,845,857      4,647,720
                                                                                -----------    -----------    -----------

Cash and cash equivalents, end of year ......................................   $ 4,137,701    $ 4,588,111    $ 4,845,857
                                                                                ===========    ===========    ===========
</TABLE>

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

                                      IV-9

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

          The  Partnership  sold 50,000  units at $1,000 per unit of  additional
     limited partner interest through a public offering. The offering period was
     terminated  on June  20,  1983.  As of  December  31,  2008,  85  units  of
     additional limited partner interest had been abandoned.

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

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

     c.   Investment in partnership
          -------------------------

          The  remaining  investment  in the Local  Partnership  (see Note 2) is
     accounted for by the equity  method  because the  Partnership  is a limited
     partner in the Local Partnership. Under this method, the carrying amount of
     the  investment in the Local  Partnership  is (i) reduced by  distributions
     received  and (ii)  increased  or  reduced  by the  Partnership's  share of
     earnings or losses, respectively,  of the Local Partnership. As of December
     31, 2008 and 2007, the remaining Local Partnership had no cumulative loss.

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

     d.   Investment in partnership held for sale or transfer
          ---------------------------------------------------

          Due to the  possible  sale or transfer of the Westgate  Tower  Limited
     Dividend  Housing  Associates   (Westgate)   property,   the  Partnership's
     investment in Westgate has been  reclassified  to investment in partnership
     held for sale or transfer in the  accompanying  balance  sheets at December
     31, 2008 and 2007.  When  investments  are  reclassified  to  investment in
     partnerships  held for sale or transfer,  amortization of acquisition  fees


                                      IV-10

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     and  property  purchase  costs are  discontinued.  Assets  held for sale or
     transfer  are not  recorded  in excess of their  estimated  net  realizable
     value.

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

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

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

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

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

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

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

          In September  2006,  the  Financial  Accounts  Standards  Board (FASB)
     issued SFAS No. 157, Fair Value Measurements ("SFAS No. 157"). SFAS No. 157
     establishes  a formal  framework  for  measuring  fair value under US GAAP.
     Although SFAS No. 157 applies  (amends) the provisions of existing FASB and
     AICPA pronouncements,  it does not require any new fair value measurements,
     nor does it establish  valuation  standards.  SFAS No. 157 is effective for
     fiscal years  beginning after November 15, 2007. We adopted the recognition
     and  disclosure  provisions  of SFAS  No.  157  for  financial  assets  and
     financial   liabilities  and  for  nonfinancial   assets  and  nonfinancial
     liabilities  that are  re-measured at least annually  effective  January 1,
     2008.  The  adoption  did  not  have a  material  impact  on our  financial
     position,  results of operations or cash flows. In accordance with FSP SFAS
     No. 157-2,  "Effective  Date of FASB Statement No. 157", we are required to
     adopt the provisions of SFAS No. 157 for all other nonfinancial  assets and
     nonfinancial  liabilities  effective  January 1, 2009 and do not expect the
     adoption to have a material  impact on our financial  position,  results of
     operations or cash flows.

          SFAS No. 157 establishes a hierarchy for inputs used in measuring fair
     value as follows:

     1.   Level 1 Inputs -- quoted prices in active markets for identical assets
          of liabilities.
     2.   Level 2 Inputs -- observe  inputs  other than quoted  prices in active
          markets for identical assets and liabilities.
     3.   Level 3 Inputs -- unobservable inputs.



                                      IV-11

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

          In certain cases,  the inputs used to measure fair value may fall into
     different levels of the fair value hierarchy. In such cases, for disclosure
     purposes,  the level within which the fair value measurement is categorized
     is based on the lowest  level input that is  significant  to the fair value
     measurement.

          The  Partnership  has  determined  that the fair value of the purchase
     money note is de minimus.

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

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

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

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

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

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

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

                                      IV-12

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

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

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

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

</TABLE>

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

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

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

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

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

          In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
     for Financial  Assets and Financial  Liabilities  Including an Amendment of
     FASB Statement No. 115" ("SFAS No. 159"). This standard permits entities to
     choose to measure many  financial  instruments  and certain  other items at
     fair value and is  effective  for the first  fiscal  year  beginning  after
     November 15, 2007. We did not make this fair value election when we adopted
     SFAS No. 159 effective January 1, 2008, and, therefore,  it did not have an
     impact on our financial position, results of operations, or cash flows.


2.   INVESTMENT IN PARTNERSHIP

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

          As of  December  31,  2008 and 2007,  the  Partnership  held a limited
     partner interest in one Local  Partnership  which was organized to develop,
     construct,  own,  maintain and operate the rental apartment  property.  The
     remaining  amounts  due  on  the  Partnership's  investment  in  one  Local
     Partnership follow.

                                                   December 31,
                                          ---------------------------
                                              2008             2007
                                          ----------       ----------

          Purchase money note             $1,400,000       $1,400,000

          Accrued interest payable         3,256,262        3,130,262
                                          ----------       ----------
                            Total         $4,656,262       $4,530,262
                                          ==========       ==========

                                      IV-13

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENT IN PARTNERSHIP - Continued

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

          The purchase  money note  outstanding  at December 31, 2008,  which is
     nonrecourse to the Partnership, is secured by the Partnership's interest in
     the Westgate Local Partnership,  which owns Westgate Tower Apartments.  The
     underlying  property does not have  sufficient  appreciation  and equity to
     enable the  Partnership  to pay the  purchase  money note's  principal  and
     accrued interest.  The Managing General Partner and the  representatives of
     the purchase money noteholders have signed a contract for the assignment of
     the  Partnership's  interest in Westgate in  satisfaction  of the  purchase
     money  note.  The gain on this  assignment  would be taxed at a federal tax
     rate of up to 35  percent.  There can be no  assurance  that a transfer  of
     Westgate will occur.

          Interest expense on the Partnership's Westgate purchase money note for
     each of the years ended December 31, 2008, 2007 and 2006, was $126,000. The
     accrued  interest  payable on the  purchase  money note of  $3,256,262  and
     $3,130,262 as of December 31, 2008 and 2007, respectively, is in default.

                                    Westgate
                                    --------

          The  Partnership  defaulted on its one remaining  purchase money note,
     related to  Westgate,  on September  1, 2003,  when the note (as  extended)
     matured and was not paid. The default amount included principal and accrued
     interest of $1,400,000 and $2,584,492,  respectively. As of March 26, 2009,
     principal and accrued interest of $1,400,000 and $3,285,604,  respectively,
     were due.

          Due to the possible  assignment  of the property  related to Westgate,
     the  Partnership's  basis  in the  Local  Partnership,  along  with the net
     unamortized  amount of acquisition fees and property purchase costs,  which
     totaled  $436,484  and  $392,458 as of December  31, 2008 and  December 31,
     2007,  respectively,  has been  reclassified  to investment in partnerships
     held for sale or transfer in the accompanying balance sheets.

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

          The  Partnership  has a 97.99%  interest in  profits,  losses and cash
     distributions (as restricted by state housing agencies) (collectively,  the
     Agencies) in the remaining Local Partnership.  An affiliate of the Managing
     General  Partner of the  Partnership is also a general partner of the Local
     Partnership.   As  stipulated  by  the  Local   Partnership's   partnership
     agreement,   the  Local   Partnership  is  required  to  make  annual  cash
     distributions  from surplus cash flow,  if any.  During 2008 and 2007,  the
     Partnership did not receive cash  distributions  from rental  operations of
     the remaining Local Partnership. As of both December 31, 2008 and 2007, the
     remaining Local Partnership did not have aggregate surplus cash, as defined
     by their respective regulatory Agencies.

          The cash  distributions  to the Partnership from the operations of the
     Local  Partnerships  may be  limited  by the  Agencies'  regulations.  Such
     regulations limit annual cash  distributions to a percentage of the owner's
     equity investment in a rental property.  Funds in excess of those which may

                                      IV-14

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENT IN PARTNERSHIP - Continued

     be distributed to owners are generally  required to be placed in a residual
     receipts  account  held by the  governing  state or federal  agency for the
     benefit of the  property.  In addition,  local  general  partners  have the
     authority to withhold funds if needed for property  repairs,  improvements,
     or other property needs.

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

     c.   Completed sales
          ---------------

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

          On December 31, 2007, the Partnership's interest in Chowchilla Elderly
     Associates,  Ltd.  (Golden  Acres) was sold.  The sale  resulted in gain on
     disposition of investment in partnerships of $2,476 for financial statement
     purposes and in gain of $922,645 for federal tax purposes.

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

          On December 31, 2007, the  Partnership's  interest in Orangewood Plaza
     Limited Partnership  (Orangewood Plaza) was sold. The sale resulted in gain
     on  disposition  of  investment  in  partnerships  of $10,000 for financial
     statement purposes and in gain of $1,330,147 for federal tax purposes.

     d.   Asset held for sale or transfer
          -------------------------------

                                    Westgate
                                    --------

          See Note 2.a., above.

     e.   Summarized financial information
          --------------------------------

          The balance sheet and statement of operations for the remaining  Local
     Partnership  in which the  Partnership is invested as of December 31, 2008,
     follow.  The information for the remaining Local Partnership has investment
     basis (equity method).


                                      IV-15

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENT IN PARTNERSHIP - Continued

<TABLE>
<CAPTION>

                                                  BALANCE SHEET
                                                December 31, 2008


                                                                                      Equity
                                                                                      Method
                                                                                    ----------
          <S>                                                                       <C>
          Number of Local Partnerships                                                   1
                                                                                         =

          Rental property, at cost, net of accumulated
            depreciation of $3,453,216                                              $1,053,112
          Land                                                                         153,473
          Other assets                                                                 424,211
                                                                                    ----------
              Total assets                                                          $1,630,796
                                                                                    ==========


          Mortgage note payable                                                     $1,045,050
          Other liabilities                                                            192,310
                                                                                    ----------
              Total liabilities                                                      1,237,360

          Partners' capital                                                            393,436
                                                                                    ----------
              Total liabilities and partners' capital                               $1,630,796
                                                                                    ==========
</TABLE>


                                              STATEMENT OF OPERATIONS
                                       For the year ended December 31, 2008

<TABLE>
<CAPTION>
                                                                                      Equity
                                                                                      Method
                                                                                    ----------
          <S>                                                                       <C>
          Number of Local Partnerships                                                   1
                                                                                         =

          Revenue:
            Rental                                                                  $  684,189
            Other                                                                       40,007
                                                                                    ----------

              Total revenue                                                            724,196
                                                                                    ----------

          Expenses:
            Operating                                                                  568,470
            Interest                                                                   (48,901)
            Depreciation and  amortization                                             159,698
                                                                                    ----------
              Total expenses                                                           679,267
                                                                                    ----------

          Net income                                                                $   44,929
                                                                                    ==========

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

          Partnership's share of
            Local Partnership net income                                                44,026
                                                                                    ----------

          Share of income from partnership                                          $   44,026
                                                                                    ==========
</TABLE>

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


                                      IV-16

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENT IN PARTNERSHIP - Continued


                                                   BALANCE SHEET
                                                 December 31, 2007

<TABLE>
<CAPTION>

                                                                                      Equity
                                                                                      Method
                                                                                    ----------
          <S>                                                                       <C>
          Number of Local Partnerships                                                   1
                                                                                         =

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

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


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

              Total liabilities                                                      1,373,012

          Partners' capital                                                            348,507
                                                                                    ----------
              Total liabilities and partners' capital                               $1,721,519
                                                                                    ==========
</TABLE>

                                              STATEMENT OF OPERATIONS
                                       For the year ended December 31, 2007
<TABLE>
<CAPTION>
                                                                                      Equity
                                                                                      Method
                                                                                    ----------
          <S>                                                                       <C>
          Number of Local Partnerships                                                   1
                                                                                         =

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

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

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

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

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

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

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

          Share of loss from partnership                                            $     (185)
                                                                                    ==========
</TABLE>

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


                                      IV-17

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENT IN PARTNERSHIP - Continued

<TABLE>
<CAPTION>
                                              COMBINED BALANCE SHEETS
                                                 December 31, 2006

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

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

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


          Mortgage notes payable                            $1,298,371        $ 2,978,929         $ 4,277,300
          Other liabilities                                    192,384            236,261             428,645
          Due to general partners                                   --              1,385               1,385
                                                            ----------        -----------         -----------

              Total liabilities                              1,490,755          3,216,575           4,707,330

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

</TABLE>

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

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

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

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

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

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

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

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

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

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

          Interest on advance                                        --            (1,249)             (1,249)
                                                            -----------       -----------         -----------
          Share of loss from partnerships                   $   (30,471)      $   (87,546)        $  (118,017)
                                                            ===========       ===========         ===========

</TABLE>

          (1)  Includes Troy Manor transferred in December 2006.


                                      IV-18

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


2.   INVESTMENT IN PARTNERSHIP - Continued

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

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

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

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

<TABLE>
<CAPTION>
                                                                      For the years ended
                                                                           December 31,
                                                           --------------------------------------------
                                                              2008             2007             2006
                                                           ----------       ----------      -----------
     <S>                                                   <C>              <C>             <C>
     Financial statement net income (loss)                 $   44,929       $     (189)     $ (305,475)

     Differences between financial statement
       and tax depreciation, amortization,
       and miscellaneous differences                          116,585          214,453         161,464
                                                           ----------       ----------      ----------
     Taxable income (loss)                                 $  161,514       $  214,264      $ (144,011)
                                                           ==========       ==========      ==========

</TABLE>


3.   RELATED PARTY TRANSACTIONS

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

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing General Partner or its affiliates for its
direct expenses in connection with managing the Partnership. For the years ended
December 31, 2008,  2007 and 2006, the Partnership  paid $172,998,  $175,260 and
$174,952,  respectively,  as direct reimbursement of expenses incurred on behalf
of the  Partnership.  Such  expenses are included in general and  administrative
expenses in the accompanying statements of operations.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The
amount of the  Management  Fee shall not exceed  0.25% of  invested  assets,  as

                                      IV-19

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


3.   RELATED PARTY TRANSACTIONS - Continued

defined  in  the   Partnership   Agreement,   and  shall  be  payable  from  the
Partnership's  cash available for  distribution,  as defined in the  Partnership
Agreement, as of the end of each calendar year, as follows:

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

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

For each of the years ended December 31, 2008,  2007 and 2006,  the  Partnership
paid the Managing General Partner a Management Fee of $249,996.

     Pursuant to approval of the Partnership's Consent Solicitation Statement on
March 22, 2004, the Managing General Partner is eligible to receive a fee of not
more than five percent of the sale price of an investment in a Local Partnership
or the  property  it owns,  payable  upon the sale of an  investment  in a Local
Partnership or the property it owns, to the extent the Managing  General Partner
markets and sells a property  instead of a real estate broker or unrelated Local
General  Partner.  The  disposition  fee on sales of  partnership  interests (as
opposed to sales of real  property) is  calculated  as up to five percent of the
imputed sale price, which is the amount the Local  Partnership's  property would
have to be sold for to produce the same  distribution  to the  investors  as the
sale of the  partnership  interests.  No such  disposition  fees  were paid with
respect to the sales of interests in Golden Acres or Orangewood Plaza.

     In addition,  the Managing  General Partner was authorized  pursuant to the
approved proxy statement to receive a Partnership  Liquidation Fee in the amount
of $500,000,  payable only if the Managing  General  Partner was  successful  in
liquidating all of the Partnership's  investments within 36 months from the date
the liquidation was approved.  As the liquidation was not completed by March 22,
2007, the Managing General Partner did not earn the fee.


4.   PARTNERSHIP PROFITS AND LOSSES, AND DISTRIBUTIONS

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

     (i)  to the payment of debts and liabilities of the Partnership  (including
          all expenses of the  Partnership  incident to the sale or refinancing)
          other than loans or other debts and  liabilities of the Partnership to
          any partner or any affiliate; such debts and liabilities,  in the case
          of a  non-liquidating  distribution,  to be only those  which are then
          required  to be paid  or,  in the  judgment  of the  Managing  General
          Partner, required to be provided for;
     (ii) to the  establishment  of any  reserves  which  the  Managing  General
          Partner  deems  reasonably  necessary  for  contingent,  unmatured  or
          unforeseen  liabilities or obligations of the  Partnership  (including
          the Partnership Liquidation Fee);

                                      IV-20

<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  Section   4.03(d)  of  the  Partnership
          Agreement;
     (iv) to the Limited  Partners (A) an aggregate amount of proceeds from sale
          or  refinancing  and all prior  sales or  refinancings  equal to their
          capital contributions,  without reduction for prior cash distributions
          other than prior distributions of sale and refinancing proceeds,  plus
          (B) an  additional  amount  equal to a cumulative  non-compounded  six
          percent return on each limited partner's capital contribution, reduced
          by (1) an amount equal to 50% of the losses for tax purposes allocated
          to such limited partner and (2) distributions of net cash flow to each
          limited  partner,  such  return,  losses for tax purposes and net cash
          flow  distributions  commencing on the first day of the month in which
          the capital contribution was made;
     (v)  to the repayment of any unrepaid loans theretofore made by any partner
          or any affiliate to the Partnership for Partnership obligations and to
          the  payment  of any  unpaid  amounts  owing to the  General  Partners
          pursuant to the Partnership Agreement;
     (vi) to the General Partners in the amount of their capital contributions;
    (vii) thereafter,  for  services  to the  Partnership,  to General  Partner
          Martin C. Schwartzberg (or his designee),  whether or not he is then a
          General Partner,  0.333% of the gross proceeds resulting from (A) such
          sale (if the proceeds are from a sale rather than a  refinancing)  and
          (B) any prior  sales from  which such fee was not paid to the  General
          Partner or his designee; and
   (viii) the remainder, 12% to the General Partners (or their assignees),  3%
          to the Special  Limited  Partner and 85% to the Initial and Additional
          Limited Partners (or their assignees).

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

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


                                      IV-21

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


4.   PARTNERSHIP PROFITS AND LOSSES, AND DISTRIBUTIONS - Continued

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

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

     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.

     As defined in the Partnership  Agreement,  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,  2008 and 2007.  The  Managing
General Partner currently  intends to retain all of the Partnership's  remaining
undistributed  cash for operating cash reserves  pending  further  distributions
under its Plan of Liquidation and Dissolution.


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

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

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

<TABLE>
<CAPTION>
                                                                          For the years ended
                                                                               December 31,
                                                              ---------------------------------------------
                                                                  2008             2007             2006
                                                              -----------       ----------      -----------
<S>                                                           <C>               <C>             <C>
Financial statement net loss                                  $ (474,775)       $ (471,865)     $ (531,175)

Adjustments:
  Differences between financial statement net
    income and taxable income related to the
    Partnership's equity in the Local Partnerships'
    income or losses and accrued expenses                        240,242           364,508         118,894

  Differences between financial statement
    gain (loss) and tax gain (loss) from the
    sale or transfer of properties                                    --         2,240,316       1,141,826
                                                              ----------        ----------      ----------
Taxable income                                                $ (234,533)       $2,132,959      $  729,545
                                                              ==========        ==========      ==========

</TABLE>

                                      IV-22

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


6.   CASH CONCENTRATION RISK

     Financial   instruments  that   potentially   subject  the  Partnership  to
concentrations of risk consist primarily of cash. The Partnership maintains four
cash  accounts.  As of December  31,  2008,  the  uninsured  portion of the cash
balances was $4,317,716.

<TABLE>
<CAPTION>

                             Number of      Bank Balance      Insured      Uninsured
        Bank                 Accounts         12/31/08        12/31/08      12/31/08
----------------------       --------       ------------      --------     ----------
<S>                          <C>            <C>               <C>          <C>
Dreyfus Inst Preferred
  Money Market Fund              2          $4,317,000        $0           $4,317,000

SunTrust Bank                    2          $18,716           $18,000      $716

</TABLE>

                                      # # #

                                      IV-23