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



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


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



                                    FORM 10-Q


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



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

                For the quarterly period ended September 30, 2008


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



                         Commission file number 0-11973

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


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



        Internal Revenue Service - Employer Identification No. 52-1321492

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


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




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 whether the registrant is a large  accelerated  filer, an
accelerated filer, or a non-accelerated filer.

Large accelerated filer |_|   Accelerated filer |_|   Non-accelerated filer |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|
--------------------------------------------------------------------------------
<PAGE>



                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                               INDEX TO FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2008



                                                                          Page
                                                                          ----
Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheets
           - September 30, 2008 and December 31, 2007.....................  1

         Statements of Operations and Accumulated Losses
           - for the three and nine months ended
             September 30, 2008 and 2007..................................  2

         Statements of Cash Flows
           - for the nine months ended September 30, 2008 and 2007........  3

         Notes to Financial Statements
           - September 30, 2008 and 2007..................................  4

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations...................................... 10

Item 4.  Controls and Procedures.......................................... 12


Part II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities.................................. 13

Item 5.  Other Information................................................ 13

Item 6.  Exhibits......................................................... 14

Signature................................................................. 15


<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>




                                                                                          September 30,   December 31,
                                                                                              2008            2007
                                                                                          ------------    ------------
                                                                                          (Unaudited)
<S>                                                                                       <C>             <C>
Investment in partnership held for sale or transfer ...................................   $    360,936    $    392,458
Cash and cash equivalents .............................................................      4,235,003       4,588,111
Other assets ..........................................................................          9,023          31,741
                                                                                          ------------    ------------

    Total assets ......................................................................   $  4,604,962    $  5,012,310
                                                                                          ============    ============


                   LIABILITIES AND PARTNERS' (DEFICIT) CAPITAL




Due on investment in partnership ......................................................   $  1,400,000    $  1,400,000
Accrued interest payable ..............................................................      3,224,762       3,130,262
Accounts payable and accrued expenses .................................................         84,317         149,718
                                                                                          ------------    ------------

    Total liabilities .................................................................      4,709,079       4,679,980
                                                                                          ------------    ------------

Commitments and contingencies

Partners' capital:

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

                                                                                            50,017,000      50,017,000
                                                                                          ------------    ------------

Less:
  Accumulated distributions to partners ...............................................    (34,752,903)    (34,752,903)
  Offering costs ......................................................................     (5,278,980)     (5,278,980)
  Accumulated losses ..................................................................    (10,089,234)     (9,652,787)
                                                                                          ------------    ------------

    Total partners' (deficit) capital .................................................       (104,117)        332,330
                                                                                          ------------    ------------

    Total liabilities and partners' (deficit) capital .................................   $  4,604,962    $  5,012,310
                                                                                          ============    ============

</TABLE>

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

                                       -1-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

                             AND ACCUMULATED LOSSES

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     For the three months ended      For the nine months ended
                                                           September 30,                    September 30,
                                                    ----------------------------    ---------------------------
                                                        2008             2007           2008            2007
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>
Share of loss from partnerships .................   $    (28,732)   $     (1,197)   $    (31,522)   $    (39,938)
                                                    ------------    ------------    ------------    ------------

Other revenue and expenses:

  Revenue:
    Interest ....................................         27,548          62,760         103,362         189,885
                                                    ------------    ------------    ------------    ------------

  Expenses:
    Management fee ..............................         62,499          62,499         187,497         187,497
    General and administrative ..................         39,331          50,868         168,999         182,638
    Interest ....................................         31,500          31,500          94,500          94,500
    Professional fees ...........................         10,941          41,813          57,291         111,438
                                                    ------------    ------------    ------------    ------------

                                                         144,271         186,680         508,287         576,073
                                                    ------------    ------------    ------------    ------------

      Total other revenue and expenses ..........       (116,723)       (123,920)       (404,925)       (386,188)
                                                    ------------    ------------    ------------    ------------

Net loss ........................................       (145,455)       (125,117)       (436,447)       (426,126)

Accumulated losses, beginning of period .........     (9,943,779)     (9,481,931)     (9,652,787)     (9,180,922)
                                                    ------------    ------------    ------------    ------------

Accumulated losses, end of period ...............   $(10,089,234)   $ (9,607,048)   $(10,089,234)   $ (9,607,048)
                                                    ============    ============    ============    ============

Net loss allocated
  to General Partners (1.51%) ...................   $     (2,196)   $     (1,889)   $     (6,590)   $     (6,435)
                                                    ============    ============    ============    ============

Net loss allocated
  to Initial and Special Limited Partners (1.49%)   $     (2,167)   $     (1,864)   $     (6,503)   $     (6,349)
                                                    ============    ============    ============    ============

Net loss allocated
  to Additional Limited Partners (97%) ..........   $   (141,092)   $   (121,364)   $   (423,354)   $   (413,342)
                                                    ============    ============    ============    ============

Net loss per unit of
  Additional Limited Partner Interest,
  based on 49,910 units outstanding .............   $      (2.83)   $      (2.43)   $      (8.48)   $      (8.28)
                                                    ============    ============    ============    ============
</TABLE>


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

                                       -2-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                For the nine months ended
                                                                                       September 30,
                                                                                ---------------------------
                                                                                    2008           2007
                                                                                ------------   ------------
<S>                                                                             <C>             <C>
Cash flows from operating activities:
  Net loss ..................................................................   $  (436,447)   $  (426,126)

  Adjustments to reconcile net loss to net cash used in operating activities:
    Share of loss from partnerships .........................................        31,522         39,938

    Changes in assets and liabilities:
      Decrease in other assets ..............................................        22,718         97,342
      Increase in accrued interest payable ..................................        94,500         94,500
      (Decrease) increase in accounts payable and accrued expenses ..........       (65,401)        19,127
                                                                                -----------    -----------

        Net cash used in operating activities ...............................      (353,108)      (175,219)
                                                                                -----------    -----------

Net decrease in cash and cash equivalents ...................................      (353,108)      (175,219)

Cash and cash equivalents, beginning of period ..............................     4,588,111      4,845,857
                                                                                -----------    -----------

Cash and cash equivalents, end of period ....................................   $ 4,235,003    $ 4,670,638
                                                                                ===========    ===========

</TABLE>


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

                                       -3-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of C.R.I.,  Inc. (CRI), the Managing  General  Partner,  the
accompanying unaudited financial statements reflect all adjustments,  consisting
of normal recurring accruals, necessary for a fair presentation of the financial
position of Capital Realty Investors-II Limited Partnership (the Partnership) as
of September 30, 2008,  and the results of its operations for the three and nine
month  periods  ended  September  30,  2008 and  2007,  and its cash  flows  and
partners'  (deficit) capital for the nine month periods ended September 30, 2008
and 2007. The results of operations for the interim  periods ended September 30,
2008, are not necessarily  indicative of the results to be expected for the full
year.

     The  accompanying  unaudited  financial  statements  have been  prepared in
conformity with accounting principles generally accepted in the United States of
America (US GAAP) and with the  instructions to Form 10-Q.  Certain  information
and accounting policies and footnote  disclosures normally included in financial
statements  prepared in conformity  with US GAAP have been  condensed or omitted
pursuant to such instructions.  These condensed  financial  statements should be
read in conjunction with the financial  statements and notes thereto included in
the Partnership's 2007 annual report on Form 10-KSB.


2.   PLAN OF LIQUIDATION AND DISSOLUTION

     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 is 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

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


2.   PLAN OF LIQUIDATION AND DISSOLUTION - Continued

(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.

<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 Partnership Liquidation Fee was
taken. 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.


3.   INVESTMENTS IN PARTNERSHIPS

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

                                    Westgate
                                    --------

     The Partnership defaulted on its one remaining purchase money note, related
to Westgate  Limited Dividend Housing  Association  (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,


                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


3.   INVESTMENTS IN PARTNERSHIPS - Continued

respectively.  As of  November  10,  2008,  principal  and  accrued  interest of
$1,400,000 and $3,238,705,  respectively, were due. The Managing General Partner
is currently working with representatives of the purchase money note holders 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 such a transfer  will
occur.

     Interest  expense on the  Partnership's  Westgate  purchase  money note was
$31,500 and $94,500 for each of the three and nine month periods ended September
30, 2008 and 2007,  respectively.  The accrued  interest payable on the purchase
money note of  $3,224,762  and  $3,130,262 as of September 30, 2008 and December
31, 2007, respectively, is in default.

     Due to the possible  assignment  of the interest  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 $360,936
and $392,458 as of September 30, 2008 and December 31, 2007,  respectively,  has
been  reclassified to investment in partnership held for sale or transfer in the
accompanying balance sheets.

b.   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.

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

                                    Westgate
                                    --------

     See Note 3.a., above.


                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


3.   INVESTMENTS IN PARTNERSHIPS - Continued

d.   Summarized financial information
     --------------------------------

     Combined  statements of operations for the one and three Local Partnerships
in which  the  Partnership  was  invested  as of  September  30,  2008 and 2007,
respectively,   follow.   The  combined   statements  have  been  compiled  from
information  supplied  by the  management  agents  of  the  properties  and  are
unaudited.  The information for each of the periods is presented  separately for
those Local Partnerships  which have positive  investment basis (equity method),
and for those Local  Partnerships  which have cumulative losses in excess of the
amount of the  Partnership's  investments  in those Local  Partnerships  (equity
method  suspended).  Appended  after  the  combined  statements  is  information
concerning the Partnership's  share of income from partnerships  related to cash
distributions  recorded  as income,  and related to the  Partnership's  share of
income from Local Partnerships.

<TABLE>
<CAPTION>
                                      COMBINED STATEMENTS OF OPERATIONS
                                                 (Unaudited)


                                                        For the three months ended
                                                               September 30,
                                               -------------------------------------------
                                                  2008                      2007
                                               ----------       --------------------------
                                                 Equity           Equity
                                                 Method           Method        Suspended
                                               ----------       ----------      ----------
      <S>                                      <C>              <C>             <C>
      Number of Local Partnerships                 1                1               2
                                                   =                =               =

      Revenue:
        Rental                                 $  164,420       $  170,430      $   106,934
        Other                                       6,661            7,723            5,394
                                               ----------       ----------       ----------

          Total revenue                           171,081          178,153          112,328
                                               ----------       ----------      -----------

      Expenses:
        Operating                                 169,356          147,657          176,964
        Interest                                   (9,753)          (8,966)          10,247
        Depreciation and amortization              40,800           40,684           27,176
                                               ----------       ----------      -----------

          Total expenses                          200,403          179,375          214,387
                                               ----------       ----------      -----------

      Net loss                                    (29,322)      $   (1,222)     $  (102,059)
                                               ----------       ==========      ===========

      Partnership's share of
        Local Partnership net loss                (28,732)          (1,197)              --
                                               ----------       ---------------------------

      Share of loss from partnerships          $  (28,732)               $(1,197)
                                               ==========                =======
</TABLE>

                                                        -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


3. INVESTMENTS IN PARTNERSHIPS - Continued

<TABLE>
<CAPTION>
                                                        For the nine months ended
                                                              September 30,
                                              ---------------------------------------------
                                                  2008                      2007
                                              -----------        --------------------------
                                                 Equity            Equity
                                                 Method            Method        Suspended
                                               ----------        ----------      ----------
     <S>                                       <C>               <C>             <C>
     Number of Local Partnerships                  1                 1               2
                                                   =                 =               =

     Revenue:
       Rental                                  $  491,058        $  509,166      $  320,801
       Other                                       39,930            23,472          16,181
                                               ----------        ----------      ----------

         Total revenue                            530,988           532,638         336,982
                                               ----------        ----------      ----------

     Expenses:
       Operating                                  470,016           478,243         530,892
       Interest                                   (29,258)          (26,899)         30,740
       Depreciation and amortization              122,399           122,051          81,527
                                               ----------        ----------      ----------

         Total expenses                           563,157           573,395         643,159
                                               ----------        ----------      ----------


     Net loss                                  $  (32,169)       $  (40,757)     $ (306,177)
                                               ==========        ==========      ==========

     Partnership's share of Local
       Partnership net loss                       (31,522)          (39,938)             --
                                               ----------        --------------------------

     Share of loss from partnerships           $  (31,522)                $(39,938)
                                               ==========                 ========

</TABLE>


     Cash  distributions  received from Local Partnerships which have investment
basis (equity method) are recorded as a reduction of investments in partnerships
and as cash  receipts  on the  respective  balance  sheets.  Cash  distributions
received from Local  Partnerships  which have cumulative losses in excess of the
amount of the  Partnership's  investments  in those Local  Partnerships  (equity
method  suspended)  are  recorded  as share of income from  partnerships  on the
respective  statements  of  operations  and as cash  receipts on the  respective
balance sheets.  As of September 30, 2008 and 2007, the  Partnership's  share of
cumulative  losses to date for zero of one and two of three Local  Partnerships,
respectively,  exceeded  the amount of the  Partnership's  investments  in those
Local Partnerships by $0 and $1,312,044, respectively. As the Partnership has no
further  obligation  to  advance  funds or  provide  financing  to  these  Local
Partnerships,  the excess  losses have not been  reflected  in the  accompanying
financial statements.

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2008 and 2007

                                   (Unaudited)


4.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner or its  affiliates  for
direct  expenses in connection  with managing the  Partnership.  The Partnership
paid $27,061 and $133,390 for the three and nine month periods  ended  September
30,  2008,  respectively,  and $37,964 and $137,313 for the three and nine month
periods ended  September 30, 2007,  respectively.  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
Partnership  paid the Managing  General  Partner a Management Fee of $62,499 for
each of the three month periods ended  September 30, 2008 and 2007, and $187,497
for each of the nine month periods ended September 30, 2008 and 2007.

     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.


5.   CASH CONCENTRATION RISK

     Financial   instruments  that   potentially   subject  the  Partnership  to
concentrations of risk consist primarily of cash. The Partnership  maintains two
cash  accounts  with the same bank.  As of  September  30, 2008,  the  uninsured
portion of the cash balances was $4,427,986.

                                      # # #

                                       -9-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion 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
the  Partnership's  annual  report on Form 10- KSB at  December  31,  2007.  The
Partnership   accounts  for  its  remaining  investment  in  partnership  (Local
Partnership)  using the  equity  method  because  the  Partnership  is a limited
partner in the Local  Partnership.  As such, the Partnership has no control over
the selection and application of accounting  policies,  or the use of estimates,
by the Local  Partnership.  Environmental  and  operational  trends,  events and
uncertainties  that might  affect the  property  owned by the Local  Partnership
would not necessarily have a significant impact on the Partnership's application
of the equity method of accounting.

                       Plan of Liquidation and Dissolution
                       -----------------------------------

     On February  4,2004,  the Partnership  filed a Definitive  Proxy Statement,
pursuant to Section  14(a) of the  Securities  Exchange Act of 1934,  to solicit
consent for,  among other things,  the sale of all of the  Partnership' s assets
and the  dissolution of the  Partnership  pursuant to a Plan of Liquidation  and
Dissolution.  As of the voting  deadline,  March 22, 2004, the holders of 28,699
units of limited partner interest (57.6%) voted "for" such sale and dissolution.

                                     General
                                     -------

     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.

                                      -10-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations - Continued


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

     The Partnership's liquidity, with unrestricted cash resources of $4,235,003
as of  September  30,  2008,  is expected to be adequate to meet its current and
anticipated  operating  cash  needs.  As of  November  10,  2008,  there were no
material  commitments  for capital  expenditures.  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.

     The  Partnership's  remaining  obligation with respect to its investment in
Westgate Tower Limited Dividend Housing Associates (Westgate),  in the form of a
nonrecourse purchase money note which matured September 1, 2003, has a principal
balance of  $1,400,000  plus accrued  interest of $3,244,762 as of September 30,
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 is currently
working  with  representatives  of the  purchase  money  note  holders  for  the
assignment  of the  Partnership's  interest in Westgate in  satisfaction  of the
purchase money note. There can be no assurance that such a transfer will occur.

     The Managing  General Partner has received  consent from a majority of Unit
Holders  for the  liquidation  of the  Partnership.  (See Note 2 of the notes to
financial  statements  contained in Part I, Item 1,  hereof.) 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 nine month period ended September 30, 2008, existing cash resources were
adequate  to support  operating  cash  requirements.  Cash and cash  equivalents
decreased  $353,108  during the nine month  period  ended  September  30,  2008,
primarily due to operating expenses paid in cash.


                                      -11-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations - Continued


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

     The  Partnership's  net loss for the three month period ended September 30,
2008 increased from the corresponding period in 2007, primarily due to increased
loss from partnerships and decreased interest revenue, partially offset by lower
professional fees and general and  administrative  expenses.  Share of loss from
partnerships  decreased  primarily  due  to  higher  operating  expenses  at one
property.  Interest  revenue  decreased  due to lower  cash and cash  equivalent
balances  and  interest  rates in 2008.  Professional  fees are  lower  due to a
reduction in audit fee expense  associated with the timing of services provided.
General and administrative  expenses decreased primarily due to lower reimbursed
payroll costs.

     The  Partnership's  net loss for the nine month period ended  September 30,
2008 increased from the corresponding period in 2007, primarily due to decreased
interest  revenue,  partially offset by lower  professional fees and general and
administrative  expenses,  all as stated above.  Share of loss from partnerships
decreased in 2008 primarily due to lower operating expenses at one property.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnership,  does not record  losses from the Local  Partnership  in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnership.  As a
result,  the  Partnership's  share of income from partnerships for the three and
nine month periods ended  September 30, 2008,  did not include  losses of $0 and
$0,  respectively,  compared to excluded losses of $101,029 and $303,086 for the
three and nine month periods ended September 30, 2007, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the three month period ended September 30, 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.


Item 4. Controls and Procedures

     In October 2008,  representatives  of the Managing  General  Partner of the
Partnership  carried out an  evaluation of the  effectiveness  of the design and
operation of the Partnership's  disclosure controls and procedures,  pursuant to
Exchange Act Rules  13a-15 and 15d-15.  The  Managing  General  Partner does not
expect that the  Partnership's  disclosure  controls and procedures will prevent
all error and all fraud.  A control  system,  no matter how well  conceived  and
operated,  can provide only  reasonable  assurance  that the  objectives  of the
control system are met. Further, the design of a control system must reflect the


                                      -12-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 4. Controls and Procedures - Continued


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 September 30, 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 have materially  affected,  or are
reasonably likely to materially affect, the Partnership's  internal control over
financial reporting.


Part II. OTHER INFORMATION
Item 3. Defaults Upon Senior Securities

     See Note 3. a. of the notes to  financial  statements  contained in Part I,
Item 1, hereof,  for  information  concerning the  Partnership's  default on one
purchase money note.


Item 5. Other Information

     There has not been any information  required to be disclosed in a report on
Form 8-K during the quarter ended September 30, 2008, but not reported,  whether
or not otherwise required by this Form 10-Q at September 30, 2008.

     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.


                                      -13-

<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits


Exhibit No.    Description
-----------    -----------

  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.

  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.

  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.

All other Items are not applicable.

                                      -14-

<PAGE>
                                    SIGNATURE


     In accordance  with the  requirements  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



November 10, 2008                  by:  /s/ H. William Willoughby
-----------------                       ----------------------------------------
DATE                                    H. William Willoughby,
                                        Director, President, Secretary,
                                          Principal Financial Officer,
                                          and Principal Accounting Officer

                                      -15-