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

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



                                   FORM 10-QSB


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



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


                  For the quarterly period ended June 30, 2002


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



                         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


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



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the  registrant  was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No o




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

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                       FOR THE QUARTER ENDED June 30, 2002



                                                                           Page

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

        Balance Sheets
          - June 30, 2002 and December 31, 2001............................   1

        Statements of Operations and Accumulated Losses
          - for the three and six months ended June 30, 2002 and 2001......   2

        Statements of Cash Flows
          - for the six months ended June 30, 2002 and 2001................   3

        Notes to Financial Statements
          - June 30, 2002 and 2001.........................................   4

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


Part II - OTHER INFORMATION

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

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

Item 6. Exhibits and Reports on Form 8-K.................................... 15

Certification of Periodic Financial Report.................................. 16

Signature................................................................... 17




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

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS


                                     ASSETS


<TABLE>
<CAPTION>

                                                                                             June 30,      December 31,
                                                                                               2002           2001
                                                                                           ------------    ------------
                                                                                            (Unaudited)
<S>                                                                                        <C>             <C>
Investments in and advances to partnerships ............................................   $  1,179,919    $  1,308,952
Investment in partnerships held for sale or transfer ...................................         39,301          15,154
Cash and cash equivalents ..............................................................      4,050,866       3,242,912
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $226,117 and $259,959, respectively ...............        139,074         170,029
Property purchase costs,
  net of accumulated amortization of $237,699 and $243,162, respectively ...............        152,820         167,124
Other assets ...........................................................................            461             108
                                                                                           ------------    ------------

   Total assets ........................................................................   $  5,562,441    $  4,904,279
                                                                                           ============    ============




                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)



Due on investments in partnerships .....................................................   $  1,900,000    $  1,900,000
Accrued interest payable ...............................................................      2,562,067       3,052,897
Accounts payable and accrued expenses ..................................................         71,881          78,568
                                                                                           ------------    ------------

   Total liabilities ...................................................................      4,533,948       5,031,465
                                                                                           ------------    ------------

Commitments and contingencies

Partners' capital (deficit):

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

                                                                                             50,017,000      50,017,000

  Less:
    Accumulated distributions to partners ..............................................    (10,814,009)    (10,814,009)
    Offering costs .....................................................................     (5,278,980)     (5,278,980)
    Accumulated losses .................................................................    (32,895,518)    (34,051,197)
                                                                                           ------------    ------------

      Total partners' capital (deficit) ................................................      1,028,493        (127,186)
                                                                                           ------------    ------------

      Total liabilities and partners' capital (deficit) ................................   $  5,562,441    $  4,904,279
                                                                                           ============    ============
</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 six months ended
                                                                 June 30,                        June 30,
                                                       ----------------------------    ----------------------------
                                                           2002            2001            2002            2001
                                                       ------------    ------------    ------------    ------------
<S>                                                    <C>             <C>             <C>             <C>
Share of income (loss) from partnerships ...........   $    333,403    $     (8,587)   $    949,184    $    743,826
                                                       ------------    ------------    ------------    ------------

Other revenue and expenses:

  Revenue:
    Gain from extinguishment of debt ...............        599,123       9,665,289         599,123       9,665,289
    Interest .......................................         12,444          44,822          22,529         124,028
                                                       ------------    ------------    ------------    ------------

                                                            611,567       9,710,111         621,652       9,789,317
                                                       ------------    ------------    ------------    ------------

  Expenses:
    Interest .......................................         57,935         135,543         115,870         280,103
    Management fee .................................         62,499          62,499         124,998         124,998
    General and administrative .....................         52,578          58,806         116,254         114,724
    Professional fees ..............................         22,250          20,637          44,500          41,775
    Amortization of deferred costs .................          6,532           7,002          13,535          14,005
                                                       ------------    ------------    ------------    ------------

                                                            201,794         284,487         415,157         575,605
                                                       ------------    ------------    ------------    ------------

      Total other revenue and expenses .............        409,773       9,425,624         206,495       9,213,712
                                                       ------------    ------------    ------------    ------------

Income before loss on disposition
  of investment in partnership .....................        743,176       9,417,037       1,155,679       9,957,538

Loss on disposition
  of investment in partnership .....................           --           (56,217)           --           (56,217)
                                                       ------------    ------------    ------------    ------------

Net income .........................................        743,176       9,360,820       1,155,679       9,901,321

Accumulated losses, beginning of period ............    (33,638,694)    (43,541,091)    (34,051,197)    (44,081,592)
                                                       ------------    ------------    ------------    ------------

Accumulated losses, end of period ..................   $(32,895,518)   $(34,180,271)   $(32,895,518)   $(34,180,271)
                                                       ============    ============    ============    ============


Net income allocated
  to General Partners (1.51%) ......................   $     11,222    $    141,348    $     17,451    $    149,510
                                                       ============    ============    ============    ============

Net income allocated
  to Initial and Special Limited Partners (1.49%) ..   $     11,073    $    139,476    $     17,220    $    147,530
                                                       ============    ============    ============    ============

Net income allocated
  to Additional Limited Partners (97%) .............   $    720,881    $  9,079,996    $  1,121,008    $  9,604,281
                                                       ============    ============    ============    ============

Net income per unit of Additional Limited
  Partner Interest based on 50,000 units outstanding   $      14.42    $     181.60    $      22.42    $     192.09
                                                       ============    ============    ============    ============
</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 six months ended
                                                                                           June 30,
                                                                                  --------------------------
                                                                                     2002            2001
                                                                                  -----------    -----------
<S>                                                                               <C>            <C>
Cash flows from operating activities:
  Net income ..................................................................   $ 1,155,679    $ 9,901,321

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of income from partnerships .........................................      (949,184)      (743,826)
    Gain from extinguishment of debt ..........................................      (599,123)    (9,665,289)
    Amortization of deferred costs ............................................        13,535         14,005
    Loss on disposition of investment in partnership ..........................          --           56,217

    Changes in assets and liabilities:
      Increase in advances to partnerships ....................................        (1,118)          --
      (Increase) decrease in other assets .....................................          (353)         1,917
      Increase in accrued interest payable ....................................       115,870        280,103
      Decrease in accounts payable and accrued expenses .......................        (6,687)       (93,386)
                                                                                  -----------    -----------

        Net cash used in operating activities .................................      (271,381)      (248,938)
                                                                                  -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..................................     1,079,335        829,060
  Additional investment in partnership ........................................          --         (198,241)
                                                                                  -----------    -----------

        Net cash provided by investing activities .............................     1,079,335        630,819
                                                                                  -----------    -----------

Cash flows from financing activities:
  Distribution to Additional Limited Partners .................................          --       (3,244,150)
                                                                                  -----------    -----------

Net increase (decrease) in cash and cash equivalents ..........................       807,954     (2,862,269)

Cash and cash equivalents, beginning of period ................................     3,242,912      6,292,654
                                                                                  -----------    -----------

Cash and cash equivalents, end of period ......................................   $ 4,050,866    $ 3,430,385
                                                                                  ===========    ===========
</TABLE>

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

                                       -3-

<PAGE>

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2002 and 2001

                                   (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 June 30, 2002, and the results of its operations for the three and six months
ended June 30, 2002 and 2001,  and its cash flows for the six months  ended June
30, 2002 and 2001.  The results of operations  for the interim period ended June
30, 2002, 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  and with the  instructions  to Form  10-QSB.  Certain  information  and
accounting  policies and  footnote  disclosures  normally  included in financial
statements prepared in conformity with accounting  principles generally accepted
in the United States of America 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
annual report on Form 10-KSB at December 31, 2001.

     In April 2002, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No. 145 (the  Statement),  "Recission  of FASB
Statements  No.  4, 44,  and 64,  ...."  The  Statement  rescinds  Statement  of
Financial  Accounting  Standards No. 4, which required all gains and losses from
extinguishment  of debt to be  aggregated  and, if  material,  classified  as an
extraordinary  item.  Accordingly,  gains from extinguishment of debt previously
reported as  extraordinary  for the three months ended March 31, 2001, have been
reclassified  in the  accompanying  statements  of  operations to conform to the
presentation required by the Statement.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

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

                              Purchase money notes
                              --------------------

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the  form  of  nonrecourse  purchase  money  notes  having  an
aggregate  principal  balance of $1,900,000 plus aggregate  accrued  interest of
$2,562,067  as of June 30,  2002,  are 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 notes,  which are  nonrecourse to the  Partnership,  are
generally  secured  by  the  Partnership's  interest  in  the  respective  Local
Partnerships.  There is no assurance  that the underlying  properties  will have
sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes'  principal and accrued  interest when due. If a purchase money note
is not paid in accordance with its terms,  the  Partnership  will either have to
renegotiate  the terms of repayment or risk losing its  partnership  interest in
the respective Local Partnership.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

     The  Partnership's  inability  to pay  certain of the  purchase  money note
principal and accrued interest balances when due, and the resulting  uncertainty
regarding the Partnership's  continued  ownership  interest in the related Local
Partnerships,  does not adversely impact the Partnership's  financial  condition
because the  purchase  money  notes are  nonrecourse  and secured  solely by the
Partnership's interest in the related Local Partnerships.  Therefore, should the
investment in any of the Local  Partnerships  with maturing purchase money notes
not produce  sufficient  value to satisfy the related  purchase money notes, the
Partnership's  exposure to loss is limited because the amount of the nonrecourse
indebtedness  of each of the maturing  purchase money notes exceeds the carrying
amount  of the  investment  in,  and  advances  to,  each of the  related  Local
Partnerships. Thus, even a complete loss of the Partnership's interest in one of
these  Local  Partnerships  would  not have a  material  adverse  impact  on the
financial condition of the Partnership.

     The  Managing  General  Partner  is  continuing  to  investigate   possible
alternatives to reduce the Partnership's  debt obligations.  These  alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note  requirements,  paying off certain purchase money notes at a
discounted  price,  extending  the due dates of certain  purchase  money  notes,
refinancing the respective properties' underlying debt or selling the underlying
real estate and using the Partnership's share of the proceeds to pay or buy down
certain purchase money note  obligations.  Although the Managing General Partner
has had some success applying these strategies in the past, the Managing General
Partner cannot assure that these strategies will be successful in the future. If
the Managing  General  Partner is unable to negotiate an extension or discounted
payoff,  in the event that the purchase money notes remain unpaid upon maturity,
the noteholders may have the right to foreclose on the Partnership's interest in
the related Local Partnerships. In the event of a foreclosure, the excess of the
nonrecourse   indebtedness   over  the  carrying  amount  of  the  Partnership's
investment  in the related Local  Partnership  would be deemed  cancellation  of
indebtedness income, which would be taxable to Limited Partners at a federal tax
rate  of  up  to  38.6%.  Additionally,  in  the  event  of a  foreclosure,  the
Partnership  would lose its investment in the Local  Partnership and,  likewise,
its share of any future  cash flow  distributed  by the Local  Partnership  from
rental operations, mortgage debt refinancings, or the sale of the real estate.

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

     Interest  expense on the  Partnership's  purchase money notes for the three
and  six  month  periods  ended  June  30,  2002,   was  $57,935  and  $115,870,
respectively,  and $135,543  and  $280,103  for the three and six month  periods
ended June 30, 2001, respectively.  The accrued interest payable on the purchase
money notes of  $2,562,067  and  $3,052,897 as of June 30, 2002 and December 31,
2001,  respectively,  is due on the  respective  maturity  dates of the purchase
money notes or earlier,  in some  instances,  if (and to the extent of a portion
thereof) the related  Local  Partnership  has  distributable  net cash flow,  as
defined in the relevant Local Partnership agreement.

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

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

     The Partnership defaulted on its purchase money note related to Frenchman's
Wharf Associates II Limited  Partnership  (Frenchman's Wharf II) on June 1, 1998
when the note matured and was not paid.  The default amount  included  principal
and accrued interest of $3,150,000 and $5,071,731,  respectively. As of June 22,
2001,  principal  and  accrued  interest  totaling  $3,150,000  and  $6,131,166,
respectively,  were due. The purchase  money note was initially due to mature on
June 1, 1988, but was extended to mature on June 1, 1998.

     In January 2001, the Local Partnership  entered into a contract to sell the
property.  However,  the purchaser was unable to consummate  the purchase.  As a
result,  in accordance  with the  forbearance  agreement,  on June 22, 2001, the
property was  transferred by  deed-in-lieu  of foreclosure to an assignee of the
mortgagee.  The transfer of the property and resulting loss of the Partnership's
interest in Frenchman's Wharf II resulted in gain from extinguishment of debt of
$9,281,166  and loss on  disposition of investment in partnership of $56,217 for
financial  statement  purposes  in 2001,  and a total  gain of  $16,450,868  for
federal tax purposes in 2001.

                                    Princeton
                                    ---------

     The  Partnership  defaulted on its purchase money note related to Princeton
Community  Village  Associates  (Princeton)  on  January  1,  1999 when the note
matured and was not paid.  The default  amount  included  principal  and accrued
interest  of  $500,000  and  $1,422,064,  respectively.  On August 9, 1999,  the
noteholder filed a complaint seeking  declaratory  judgment that the Partnership
had forfeited its interest in Princeton to the  noteholder.  The  litigation was
settled  effective  January 1, 2000,  when the Managing  General Partner entered
into an agreement with the noteholder  which granted the noteholder four options
to purchase the Partnership's  98.99% limited partner interest in Princeton over
a three and one-half year period,  in exchange for the  cancellation of pro-rata
portions of the then outstanding  balance of the purchase money note. As part of
the agreement,  the noteholder  extended the maturity date of the purchase money
note to January 1, 2004, and the Partnership made a payment to the noteholder on
April 21,  2000,  which was  applied  against  accrued  interest  payable on the
purchase  money  note.  However,  pursuant  to the  option  agreement  with  the
noteholder,  the  noteholder  can  exercise  its  option to acquire of the final
portion of the Partnership's interest between January 1, 2003 and June 30, 2003.
Therefore,  the  Partnership  has  selected the  earliest  maturity  date of the
purchase money note to be January 1, 2003.

     On April  30,  2002,  pursuant  to the  option  agreement,  the  noteholder
purchased  half of the  Partnership's  remaining  limited  partner  interest  in
Princeton,  the  consideration  for which was the  cancellation  of  $606,700 of
purchase  money  note  accrued  interest.  The  purchase  resulted  in  gain  on
extinguishment  of  debt  of  $599,123  for  financial  statement  purposes  and
$1,783,122  for federal tax  purposes in 2002.  On both June 1, 2001 and May 31,
2000,  pursuant to the option  agreement,  the  noteholder  purchased 26% of the
Partnership's original limited partner interest in Princeton,  the consideration
for which was the cancellation of a like percentage of the outstanding  purchase
money note accrued interest of $392,333 and $493,027, respectively, resulting in
gain  from  extinguishment  of debt  of  $384,123  and  $484,862  for  financial
statement  purposes  in 2001 and  2000,  respectively,  and in  cancellation  of
indebtedness  income of $1,583,512  and  $1,960,030  for federal tax purposes in
2001 and 2000, respectively.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     Due  to  the  impending  and  likely  transfer  of  the  remainder  of  the
Partnership's   investment  in  Princeton,   the  net  unamortized   amounts  of
acquisition fees and property purchase costs related to Princeton, which totaled
$7,577 as of June 30,  2002 and  $15,154  as of  December  31,  2001,  have been
reclassified  to  investment  in  partnerships  held for sale or transfer in the
accompanying balance sheets.

b.   Advances to Local Partnership
     -----------------------------

     To cover a tax liability  incurred in 2001 by Troy  Apartments  Ltd.  (Troy
Manor), the Partnership  advanced funds of $1,118 during the quarter ended March
31, 2002.  This advance is payable from cash flow of Troy Manor.  For  financial
reporting purposes,  this advance has been reduced to zero by the Partnership as
a result of losses at the Local Partnership level.

c.   Property matters
     ----------------

                                Country Place II
                                ----------------

     The Section 8 Housing  Assistance  Payments (HAP) contract for the property
owned by Second Blackburn Ltd. Partnership (Country Place II) originally expired
August 29,  2000.  The  Section 8 HAP  contract  covered  20% of the  property's
apartment units. The Local  Partnership has caused the Section 8 HAP contract to
be renewed  periodically;  when the current renewal period expired in June 2002,
the Local Partnership opted out of the HAP program.

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

     The 1983 construction loan related to Orangewood Plaza, a 40-unit apartment
complex in Orange Cove, California,  was never formally converted to a permanent
loan. It is now  anticipated  that this loan will be  restructured  in 2002 as a
permanent  loan,  with no tax  impact to either  the  Local  Partnership  or the
Partnership. There is no assurance that the restructuring will be consummated.

     In 1983, the Partnership  pledged its interest in the Local  Partnership as
security on an  acquisition  note, in the amount of $170,000,  made by the Local
Partnership. The note matured on July 28, 1998 and was not paid when due. On May
7, 2001, the  Partnership  made a capital  contribution of $198,241 to the Local
Partnership,  which  amount was used to pay in full the  principal  and  accrued
interest on the acquisition note.

                                    Rock Glen
                                    ---------

     In June 2002, a contract for the sale of the Rock Glen Limited  Partnership
(Rock Glen)  property  was signed.  Due to the  impending  sale of the  property
related  to the  Partnership's  investment  in Rock  Glen,  the net  unamortized
amounts of  acquisition  fees and property  purchase costs related to Rock Glen,
which totaled $31,724 at June 30, 2002, have been  reclassified to investment in
partnerships held for sale or transfer in the accompanying balance sheet at June
30, 2002.

                                      -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

     Combined  statements of operations for the 14 Local  Partnerships  in which
the Partnership was invested as of June 30, 2002 and 2001,  follow. The combined
statements have been compiled from information supplied by the management agents
of the projects and are unaudited. The combined statements of operations for the
three and six months ended June 30, 2001,  include  information  for Frenchman's
Wharf II through date of its transfer on June 22, 2001.


                                         COMBINED STATEMENTS OF OPERATIONS
                                                    (Unaudited)

<TABLE>
<CAPTION>
                                               For the three months ended          For the six months ended
                                                         June 30,                          June 30,
                                               ---------------------------        ---------------------------
                                                   2002             2001             2002              2001
                                               -----------      -----------       -----------      -----------
         <S>                                   <C>              <C>               <C>              <C>
         Revenue:
           Rental                              $ 4,721,014      $ 4,861,055       $ 9,537,880      $ 9,722,795
           Other                                   285,701          224,326           568,161          435,717
                                               -----------      -----------       -----------      -----------

             Total revenue                       5,006,715        5,085,381        10,106,041       10,158,512
                                               -----------      -----------       -----------      -----------

         Expenses:
           Operating                             3,001,230        2,650,317         5,905,422        5,640,518
           Interest                              1,267,739        1,428,188         2,535,486        2,856,379
           Depreciation and amortization           819,017          910,641         1,638,032        1,821,286
                                               -----------      -----------       -----------      -----------

             Total expenses                      5,087,986        4,989,146        10,078,940       10,318,183
                                               -----------      -----------       -----------      -----------

         Net (loss) income                     $   (81,271)     $    96,235       $    27,101      $  (159,671)
                                               ===========      ===========       ===========      ===========

</TABLE>

     As of June 30, 2002 and 2001, the Partnership's  share of cumulative losses
to date  for  nine of the 14  Local  Partnerships  exceeded  the  amount  of the
Partnership's  investments  in and  advances  to  those  Local  Partnerships  by
$21,277,888  and  $20,695,689,  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.


3.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $34,571 and
$94,537 for the three and six month periods  ended June 30, 2002,  respectively,
and $47,278 and $89,248 for the three and six month periods ended June 30, 2001,
respectively,  to the  Managing  General  Partner  as  direct  reimbursement  of
expenses  incurred on behalf of the  Partnership.  Such expenses are included in
the  accompanying   statements  of  operations  as  general  and  administrative
expenses.

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2002 and 2001

                                   (Unaudited)


3.   RELATED PARTY TRANSACTIONS - Continued

     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 June 30, 2002 and 2001,  and $124,998 for
each of the six month periods ended June 30, 2002 and 2001.

                                      # # #

                                       -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 contains  information that may be considered forward looking,
including  statements regarding the effect of governmental  regulations.  Actual
results  may differ  materially  from those  described  in the  forward  looking
statements and will be affected by a variety of factors  including  national and
local economic  conditions,  the general level of interest  rates,  governmental
regulations  affecting the Partnership and interpretations of those regulations,
the  competitive   environment  in  which  the  Partnership  operates,  and  the
availability of working capital.

                                     General
                                     -------

     Some of the rental properties owned by the Local  Partnerships are financed
by state housing agencies.  The Managing General Partner has sold or refinanced,
and will continue to sell or refinance,  certain properties pursuant to programs
developed by these agencies.  These programs may include opportunities to sell a
property to a qualifying  purchaser  who would agree to maintain the property as
low to  moderate  income  housing,  or to  refinance  a  property,  or to obtain
supplemental  financing.  The  Managing  General  Partner  continues  to monitor
certain state  housing  agency  programs,  and/or  programs  provided by certain
lenders, to ascertain whether the properties would qualify within the parameters
of a given  program and whether  these  programs  would  provide an  appropriate
economic benefit to the limited partners of the Partnership.

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

     Mark-to-Market (M2M) implementation will reduce rental income at properties
that are currently  subsidized  at  higher-than-market  rental  rates,  and will
therefore  lower cash flow  available to meet  mortgage  payments and  operating
expenses.  In some instances,  a property will be able to meet its existing debt
service  payments  after the  reduction  in rental  income.  In this  case,  the
property  may enter  the M2M  "Lite"  program,  which  would not  require a debt
restructuring.  In the remaining  instances,  the affected  property may undergo
debt restructuring  according to terms determined by an individual  property and
operations  evaluation.  This would  involve  reducing the first  mortgage  loan
balance to an amount  supportable  by the  property's  operations,  taking  into
account the property's operating expenses and reduced income. The balance of the
amount  written down from the first  mortgage  loan would be converted to a non-
performing but accruing  (soft) second  mortgage  loan.  When the existing first
mortgage loan is bifurcated  into a first and second  mortgage  loan,  the newly
created  second  mortgage  loan will  accrue  interest at a  below-market  rate;
however,  the  Internal  Revenue  Service  issued a  ruling  in July  1998  that
concluded that the below-market  rate of interest would not generate  additional
ordinary  income.  Each property  subject to M2M will be affected in a different
manner, and it is very difficult to predict the exact form of restructuring,  or
potential tax liabilities to the limited partners, at this time. All properties,
upon entering the M2M program  (excluding M2M Lite),  are required to enter into
an agreement restricting the property's use to affordable housing for 30 years.

                                      -10-

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


     Finally, under HUD's "Mark-up-to-Market"  program, properties with expiring
Section 8 HAP  contracts  that are located in high-rent  areas as defined by HUD
are eligible  for rent  increases  which would be  necessary to bring  Section 8
rents in line with market rate rents.  For properties that enter the program and
have interest  rate  subsidized  FHA loans,  the rents are adjusted to take into
account the  benefits the property is already  receiving  from the  below-market
interest rate by means of a  HUD-determined  adjustment  factor.  The purpose of
this program is to provide  incentives  to owners of  properties  with  expiring
Section 8 HAP contracts not to convert these properties to market rate housing.

     In return for  receiving  market  rate rents under  Mark-up-to-Market,  the
property  owner must enter into a five year  conditional  Section 8 HAP contract
with HUD,  subject  to the  annual  availability  of  funding  by  Congress.  In
addition,  property  owners who enter into the  Mark-up-to-  Market program will
receive  increased  cash flow as the limited  dividend  will be  increased in an
amount equal to the increase in gross revenues.

     Country  Place II has a  Section 8 HAP  contract  which  covers  20% of the
property's  apartment  units.  The current  renewal  period of the Section 8 HAP
contract expired in June 2002, at which time the Local  Partnership opted out of
the HAP program.

     As of June 30, 2002,  there were no properties with Section 8 HAP contracts
expiring in the next 12 months.

     The Managing  General  Partner  continues to seek  strategies  to deal with
affordable  housing policy.  Where  opportunities  exist,  the Managing  General
Partner will continue to work with the Local  Partnerships to develop strategies
that make economic sense.

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

     The Partnership's liquidity, with unrestricted cash resources of $4,050,866
as of June 30, 2002, along with anticipated  future cash  distributions from the
Local  Partnerships,  is  expected  to be  adequate  to  meet  its  current  and
anticipated  operating cash needs. As of August 9, 2002,  there were no material
commitments for capital expenditures.

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the  form  of  nonrecourse  purchase  money  notes  having  an
aggregate  principal  balance of $1,900,000 plus aggregate  accrued  interest of
$2,562,067  as of June 30,  2002,  are 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.  See Note 2.a. of the notes to financial  statements contained in Part
I, Item 1, hereof, for information concerning purchase money notes.

     The purchase money notes,  which are  nonrecourse to the  Partnership,  are
generally  secured  by  the  Partnership's  interest  in  the  respective  Local
Partnerships.  There is no assurance  that the underlying  properties  will have
sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes'  principal and accrued  interest when due. If a purchase money note
is not paid in accordance with its terms,  the  Partnership  will either have to
renegotiate  the terms of repayment or risk losing its  partnership  interest in
the respective Local Partnership.

                                      -11-

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


     The  Partnership's  inability  to pay  certain of the  purchase  money note
principal and accrued interest balances when due, and the resulting  uncertainty
regarding the Partnership's  continued  ownership  interest in the related Local
Partnerships,  does not adversely impact the Partnership's  financial  condition
because the  purchase  money  notes are  nonrecourse  and secured  solely by the
Partnership's interest in the related Local Partnerships.  Therefore, should the
investment in any of the Local  Partnerships  with maturing purchase money notes
not produce  sufficient  value to satisfy the related  purchase money notes, the
Partnership's  exposure to loss is limited because the amount of the nonrecourse
indebtedness  of each of the maturing  purchase money notes exceeds the carrying
amount  of the  investment  in,  and  advances  to,  each of the  related  Local
Partnerships. Thus, even a complete loss of the Partnership's interest in one of
these  Local  Partnerships  would  not have a  material  adverse  impact  on the
financial condition of the Partnership.

     The  Managing  General  Partner  is  continuing  to  investigate   possible
alternatives to reduce the Partnership's  debt obligations.  These  alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note  requirements,  paying off certain purchase money notes at a
discounted  price,  extending  the due dates of certain  purchase  money  notes,
refinancing the respective properties' underlying debt or selling the underlying
real estate and using the Partnership's share of the proceeds to pay or buy down
certain purchase money note  obligations.  Although the Managing General Partner
has had some success applying these strategies in the past, the Managing General
Partner cannot assure that these strategies will be successful in the future. If
the Managing  General  Partner is unable to negotiate an extension or discounted
payoff,  in the event that the purchase money notes remain unpaid upon maturity,
the noteholders may have the right to foreclose on the Partnership's interest in
the related Local Partnerships. In the event of a foreclosure, the excess of the
nonrecourse   indebtedness   over  the  carrying  amount  of  the  Partnership's
investment  in the related Local  Partnership  would be deemed  cancellation  of
indebtedness income, which would be taxable to Limited Partners at a federal tax
rate  of  up  to  38.6%.  Additionally,  in  the  event  of a  foreclosure,  the
Partnership  would lose its investment in the Local  Partnership and,  likewise,
its share of any future  cash flow  distributed  by the Local  Partnership  from
rental operations, mortgage debt refinancings, or the sale of the real estate.

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

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the six  month  periods  ended  June  30,  2002 and  2001,  the  receipt  of
distributions  from Local  Partnerships  was adequate to support  operating cash
requirements.  Cash and cash  equivalents  increased during the six month period
ended June 30, 2002,  as the receipt of  distributions  from Local  Partnerships
exceeded net cash used in operating activities.

     The  Managing  General  Partner  currently  intends  to  retain  all of the
Partnership's   remaining   undistributed  cash  for  the  possible   repayment,
prepayment or retirement of the Partnership's  outstanding  purchase money notes
related  to  the  Local  Partnerships,  and  for  operating  cash  reserves.  No
distributions  were  declared  or paid by the  Partnership  during the six month
period ended June 30, 2002.

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

     The  Partnership's  net income for the three  month  period  ended June 30,
2002,  decreased from the corresponding period in 2001 primarily due to the gain
from extinguishment of debt related to the loss of the Partnership's interest in
Frenchman's Wharf Associates II Limited

                                      -12-

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


Partnership  (Frenchman's  Wharf II), partially offset by loss on disposition of
investment  in  partnership  in 2001,  which was larger  than the  corresponding
amounts  related  to the sale and  transfer  of a portion  of the  Partnership's
interest  in  Princeton  Community  Village  Associates   (Princeton)  in  2002.
Contributing to the decrease in the  Partnership's net income were a decrease in
interest  revenue  due to lower  cash and cash  equivalent  balances  and  lower
interest  rates in 2002,  and higher  professional  fees related to audit costs.
Partially  offsetting  the  decrease  in the  Partnership's  net income  were an
increase in share of income from  partnerships  generally related to an increase
in rental  revenue at one property and the  additional  investment in Orangewood
Plaza, made in 2001, but not in 2002, which was offset by unallowable  losses, a
decrease in interest  expense due to lower purchase  money note balances,  and a
decrease  in general  and  administrative  expense  related to lower  reimbursed
payroll costs.

     The  Partnership's net income for the six month period ended June 30, 2002,
decreased from the  corresponding  period in 2001 due to a decrease in gain from
extinguishment  of debt, a decrease in interest revenue and higher  professional
fees, all as discussed  above.  Contributing  to the decrease was an increase in
general and  administrative  fees related to higher  reimbursed  payroll  costs.
Offsetting  the  decrease  in the  Partnership's  net income were an increase in
share of income from partnerships,  a decrease in interest expense,  and loss on
disposition of investment in partnership, all as discussed above.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnerships. As a
result,  the  Partnership's  share of income from partnerships for the three and
six month  periods  ended June 30, 2002 did not include  losses of $272,922  and
$548,203, respectively, compared to excluded losses of $251,841 and $523,785 for
the three and six month periods ended June 30, 2001, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the six month period ended June 30, 2002.


Part II. OTHER INFORMATION
Item 3. Defaults upon Senior Securities
        -------------------------------

     See Note 2.a. of the notes to  financial  statements  contained  in Part I,
Item 1,  hereof,  for  information  concerning  the  Partnership's  defaults  on
purchase money notes.


Item 5. Other Information
        -----------------

     Thereis  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.

                                  Tender offers
                                  -------------

     On March 13, 2001, Bond Purchase,  L.L.C.  (Bond) initiated an unregistered
tender offer to purchase  approximately  2,475 of the  outstanding  Units in the
Partnership at a price of $53 per Unit;  the offer expired April 30, 2001.  Bond
is unaffiliated with the Partnership or the Managing General Partner.  The price
offered was determined solely at the discretion of Bond and does not necessarily
represent the fair market value of each Unit.

                                      -13-

<PAGE>
Part II. OTHER INFORMATION
Item 5. Other Information - Continued
        -----------------


     The  Managing  General  Partner did not  express  any opinion and  remained
neutral toward the Bond offer for the purchase of Units described above.

     On or about May 10,  2001,  Limited  Partners in the  Partnership  may have
received an  unregistered  tender offer from Peachtree  Partners  (Peachtree) to
purchase  their  units  of  Limited  Partner  interest  for the cost of the $100
transfer fee.

     The Managing  General Partner  recommended that Limited Partners reject the
Peachtree  offer because it concluded  that the tender offer was  inadequate and
not in the best interests of the Limited Partners.

     On June 22, 2001,  Equity  Resources  Lexington  Fund  Limited  Partnership
(Lexington)  initiated a registered tender offer to purchase up to 10,000 of the
outstanding  Units in the  Partnership  at a price of $100 per  Unit;  the offer
expired July 23, 2001.  On November 19, 2001,  Lexington  initiated a registered
tender  offer  to  purchase  up to  10,000  of  the  outstanding  Units  in  the
Partnership at a price of $100 per Unit; the offer expired December 19, 2001. On
May 10, 2002,  Lexington  initiated a registered  tender offer to purchase up to
5,000 of the  outstanding  Units in the Partnership at a price of $100 per Unit;
the offer expired June 10, 2002.  Lexington is unaffiliated with the Partnership
or the Managing  General Partner.  The prices offered were determined  solely at
the  discretion  of Lexington and do not  necessarily  represent the fair market
value of each Unit.

     In response to the Lexington  tender offers,  on July 5, 2001,  December 3,
2001 and May 20, 2002, the Managing  General Partner filed  Schedules  14D-9. In
those filings,  the Managing  General Partner  recommended that Limited Partners
reject the Lexington offers because it viewed the offer prices as inadequate.

     During 2001, a number of investors  sold their Units in the  Partnership to
other investors as a result of the tender offers  described  above. If more than
five percent of the total  outstanding  Units in the Partnership are transferred
due to sale in any one calendar year (not counting  certain  exempt  transfers),
the  Partnership  could  be  taxed  as a  "publicly  traded  partnership,"  with
potentially  severe tax  implications  for the  Partnership  and its  investors.
Specifically,  the Partnership  could be taxed as a corporation  and, if so, the
income and losses from the  Partnership  would no longer be considered a passive
activity.  From  January  1, 2001,  through  August 13,  2001,  the  Partnership
received sale transfer requests for approximately  4.9% of the total outstanding
Units.  Accordingly,  to remain  within the five percent safe harbor,  effective
August  13,  2001,  the  Managing  General  Partner  halted  recognition  of any
transfers that would exceed the safe harbor limit through  December 31, 2001. As
a result, transfers of Units due to sales transactions were not being recognized
by the  Partnership  between August 14, 2001 and December 31, 2001. The halt was
lifted effective  January 1, 2002. For the calendar year 2002 to August 9, 2002,
Units  transferred  have  not  exceeded  4.9% of the  total  outstanding  Units;
therefore, the Partnership has not halted recognition of transfers.

                                Cash distribution
                                -----------------

     On May 2, 2001,  the  Partnership  made a cash  distribution  of $3,244,150
($65.00 per Unit) to Additional  Limited  Partners who were holders of record as
of April 1, 2001.

                                      -14-

<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
        --------------------------------

     a.   None

     b.   No  reports  on Form 8-K were  filed  with the  Commission  during the
          quarter ended June 30, 2002.

All other Items are not applicable.

                                      -15-

<PAGE>
                   CERTIFICATION OF PERIODIC FINANCIAL REPORT
                       Pursuant to 18 U.S.C. Section 1350


     Pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
the Sarbanes- Oxley Act of 2002, we, the undersigned,  certify that, to the best
or our knowledge,  this periodic report of CAPITAL REALTY  INVESTORS-II  LIMITED
PARTNERSHIP, filed on Form 10- QSB for the quarterly period ended June 30, 2002,
and containing the financial statements, fully complies with the requirements of
section  13(a)  or  15(d) of the  Securities  Exchange  Act of 1934 and that the
information  contained in the periodic report fairly  presents,  in all material
respects, the financial condition and results of operations of the issuer.


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

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



August 9, 2002                      by:  /s/ William B. Dockser
--------------                           ---------------------------------------
DATE                                     William B. Dockser,
                                           Director, Chairman of the Board,
                                           and Treasurer
                                           (Principal Executive Officer)




August 9, 2002                      by:  /s/ Michael J. Tuszka
--------------                           ---------------------------------------
DATE                                     Michael J. Tuszka,
                                           Vice President
                                           and Chief Accounting Officer
                                           (Principal Financial Officer)


     This  certification  is made solely for purpose of 18 U.S.C.  Section 1350,
subject  to the  knowledge  standard  contained  therein,  and not for any other
purpose.


                                      -16-

<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




August 9, 2002              by:  /s/ Michael J. Tuszka
--------------                   -----------------------------------------------
DATE                             Michael J. Tuszka
                                   Vice President
                                   and Chief Accounting Officer
                                   (Principal Financial Officer
                                   and Principal Accounting Officer)

                                      -17-