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


                     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, 2001


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



                         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, 2001


                                                                           Page

Part I - FINANCIAL INFORMATION

Item 1.    Financial Statements

           Balance Sheets
               - June 30, 2001 and December 31, 2000....................... 1

           Statements of Operations and Accumulated Losses
               - for the three and six months ended June 30, 2001 and 2000. 2

           Statements of Cash Flows
               - for the six months ended June 30, 2001 and 2000........... 3

           Notes to Financial Statements
               - June 30, 2001 and 2000.................................... 4

Item 2.    Management's Discussion and Analysis of Financial Condition
               and Results of Operations...................................12


Part II - OTHER INFORMATION

Item 3.    Defaults Upon Senior Securities.................................15

Item 5.    Other Information...............................................15

Item 6.    Exhibits and Reports on Form 8-K................................17

Signature..................................................................18




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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS


                                     ASSETS
<TABLE>
<CAPTION>

                                                                                        June 30,       December 31,
                                                                                          2001            2000
                                                                                      ------------    ------------
                                                                                       (Unaudited)
<S>                                                                                   <C>             <C>
Investments in and advances to partnerships .......................................   $    842,196    $    729,191
Investment in partnerships held for sale or transfer ..............................         15,154          79,579
Cash and cash equivalents .........................................................      3,430,385       6,292,654
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $252,792 and $245,626, respectively ..........        177,195         184,362
Property purchase costs,
  net of accumulated amortization of $236,324 and $229,486, respectively ..........        173,962         180,800
Other assets ......................................................................            621           2,538
                                                                                      ------------    ------------

     Total assets .................................................................   $  4,639,513    $  7,469,124
                                                                                      ============    ============




                        LIABILITIES AND PARTNERS' DEFICIT



Due on investments in partnerships ................................................   $  1,900,000    $  5,050,000
Accrued interest payable ..........................................................      2,912,809       9,156,205
Accounts payable and accrued expenses .............................................         82,964         176,350
                                                                                      ------------    ------------

     Total liabilities ............................................................      4,895,773      14,382,555
                                                                                      ------------    ------------

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)     (7,569,859)
    Offering costs ................................................................     (5,278,980)     (5,278,980)
    Accumulated losses ............................................................    (34,180,271)    (44,081,592)
                                                                                      ------------    ------------

      Total partners' deficit .....................................................       (256,260)     (6,913,431)
                                                                                      ------------    ------------

      Total liabilities and partners' deficit .....................................   $  4,639,513    $  7,469,124
                                                                                      ============    ============
</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,
                                                       ----------------------------    ----------------------------
                                                           2001            2000            2001            2000
                                                       ------------    ------------    ------------    ------------
<S>                                                    <C>             <C>             <C>             <C>
Share of (loss) income from partnerships ...........   $     (8,587)   $     17,401    $    743,826    $    669,661
                                                       ------------    ------------    ------------    ------------

Other revenue and expenses:

  Revenue:
    Interest .......................................         44,822         116,312         124,028         223,845
                                                       ------------    ------------    ------------    ------------

  Expenses:
    Interest .......................................        135,543         231,649         280,103         506,715
    Management fee .................................         62,499          62,499         124,998         124,998
    General and administrative .....................         58,806          58,414         114,724         111,575
    Professional fees ..............................         20,637          28,182          41,775          53,463
    Amortization of deferred costs .................          7,002           7,832          14,005          18,582
                                                       ------------    ------------    ------------    ------------

                                                            284,487         388,576         575,605         815,333
                                                       ------------    ------------    ------------    ------------

      Total other revenue and expenses .............       (239,665)       (272,264)       (451,577)       (591,488)
                                                       ------------    ------------    ------------    ------------

(Loss) income before gain on disposition
  of investments in partnerships ...................       (248,252)       (254,863)        292,249          78,173

(Loss) gain on disposition
  of investments in partnerships ...................        (56,217)      5,879,778         (56,217)      5,879,778
                                                       ------------    ------------    ------------    ------------

(Loss) income before extraordinary gain
  from extinguishment of debt ......................       (304,469)      5,624,915         236,032       5,957,951

Extraordinary gain from extinguishment of debt .....      9,665,289      10,074,759       9,665,289      10,074,759
                                                       ------------    ------------    ------------    ------------

Net income .........................................      9,360,820      15,699,674       9,901,321      16,032,710

Accumulated losses, beginning of period ............    (43,541,091)    (59,302,152)    (44,081,592)    (59,635,188)
                                                       ------------    ------------    ------------    ------------

Accumulated losses, end of period ..................   $(34,180,271)   $(43,602,478)   $(34,180,271)   $(43,602,478)
                                                       ============    ============    ============    ============


Net income allocated to General Partners (1.51%) ...   $    141,348    $    237,065    $    149,510    $    242,094
                                                       ============    ============    ============    ============


Net income allocated
  to Initial and Special Limited Partners (1.49%) ..   $    139,476    $    233,925    $    147,530    $    238,887
                                                       ============    ============    ============    ============


Net income allocated
  to Additional Limited Partners (97%) .............   $  9,079,996    $ 15,228,684    $  9,604,281    $ 15,551,729
                                                       ============    ============    ============    ============


Net income per unit of Additional Limited
  Partner Interest based on 50,000 units outstanding   $     181.60    $     304.57    $     192.09    $     311.03
                                                       ============    ============    ============    ============

</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,
                                                                                  -----------------------------
                                                                                    2001               2000
                                                                                  -----------------------------
<S>                                                                               <C>             <C>
Cash flows from operating activities:
  Net income ..................................................................   $  9,901,321    $ 16,032,710

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of income from partnerships .........................................       (743,826)       (669,661)
    Amortization of deferred costs ............................................         14,005          18,582
    Loss (gain) on disposition of investments in partnerships .................         56,217      (5,879,778)
    Extraordinary gain from extinguishment of debt ............................     (9,665,289)    (10,074,759)

    Changes in assets and liabilities:
      Decrease (increase) in other assets .....................................          1,917          (1,385)
      Increase in accrued interest payable ....................................        280,103         506,715
      Payment of purchase money note interest .................................           --          (175,000)
      Decrease in accounts payable and accrued expenses .......................        (93,386)        (43,554)
                                                                                  ------------    ------------

        Net cash used in operating activities .................................       (248,938)       (286,130)
                                                                                  ------------    ------------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..................................        829,060         797,827
  Proceeds from disposition of investments in partnerships ....................           --         5,993,661
  Additional investment in partnership ........................................       (198,241)           --
                                                                                  ------------    ------------

        Net cash provided by investing activities .............................        630,819       6,791,488
                                                                                  ------------    ------------

Cash flows from financing activities:
  Payoff of purchase money notes and related interest .........................           --        (5,993,661)
  Payment of purchase money note principal ....................................           --           (50,000)
  Distribution to Additional Limited Partners .................................     (3,244,150)     (1,622,237)
                                                                                  ------------    ------------

       Net cash used in financing activities ..................................     (3,244,150)     (7,665,898)
                                                                                  ------------    ------------

Net decrease in cash and cash equivalents .....................................     (2,862,269)     (1,160,540)

Cash and cash equivalents, beginning of period ................................      6,292,654       8,936,520
                                                                                  ------------    ------------

Cash and cash equivalents, end of period ......................................   $  3,430,385    $  7,775,980
                                                                                  ============    ============


Supplemental disclosure of cash flow information:
  Cash paid during the period for interest ....................................   $       --      $  3,919,914
                                                                                  ============    ============
</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, 2001 and 2000

                                   (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, 2001, and the results of its operations for the three and six months
ended June 30, 2001 and 2000,  and its cash flows for the six months  ended June
30, 2001 and 2000. The results of operations for the interim  periods ended June
30, 2001, 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
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 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, 2000.


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 purchase money notes having an aggregate principal
balance of $1,900,000 plus aggregate  accrued  interest of $2,912,809 as of June
30, 2001,  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 maturity  dates of the purchase  money notes  related to the  following
properties were extended during 2000.

                                             Original     Extended
         Property           Principal        Maturity     Maturity
         --------           ----------       --------     --------
         Princeton          $  500,000       01/01/99     01/01/04
         Westgate           $1,400,000 (1)   09/01/98     09/01/03

     (1)  Remaining principal after a partial payment.

     The purchase money notes related to the following  properties were paid off
at a discount,  or the  collateral  that  secured  them was  transferred  to the
noteholder(s), during 2000 or 2001.

         Property                     Principal        Date      Disposition
         --------                     ---------      --------    -----------
         Rolling Green at Amherst     $1,927,500     May 2000     Paid Off
         Rolling Green at Fall River  $4,600,000     May 2000     Paid Off
         Frenchman's Wharf II         $3,150,000     June 2001    Transferred


                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     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.  In the event  that a  purchase  money note
remains unpaid upon maturity,  the noteholder may have the right to foreclose on
the Partnership's  interest in the related Local Partnership.  In the event of a
foreclosure, the excess of the nonrecourse indebtedness over the carrying amount
of the Partnership's investment in the related Local Partnership would be deemed
cancellation of indebtedness  income, which would be taxable to Limited Partners
at a  federal  tax  rate  of  up to  39.6%.  Additionally,  in  the  event  of a
foreclosure,  the Partnership would lose its investment in the Local Partnership
and,  likewise,  its  share of any  future  cash flow  distributed  by the Local
Partnership from rental operations,  mortgage debt refinancings,  or the sale of
the real estate.

     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  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 efforts
will be successful.

     Interest  expense on the  Partnership's  purchase money notes for the three
and  six  month  periods  ended  June  30,  2001,  was  $135,543  and  $280,103,
respectively,  and $231,649  and  $506,715  for the three and six month  periods
ended June 30, 2000, respectively.  The accrued interest payable on the purchase
money notes of  $2,912,809  and  $9,156,205 as of June 30, 2001 and December 31,
2000,  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 agreements.

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (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 1996, the U. S. Department of Housing and Urban  Development  (HUD) sold
the mortgage loan on Frenchman's  Wharf II to a third party lender. In May 2000,
the local managing  general  partner  obtained a forbearance  agreement from the
lender  which was  originally  scheduled to expire on May 31, 2001 but which was
subsequently  extended  several  times  until  June 25,  2001.  The  forbearance
agreement allowed for the discounted payoff of the mortgage loan.

     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 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 extraordinary gain from  extinguishment of debt of $9,281,166 and
loss on  disposition of  investments  in  partnerships  of $56,217 for financial
statement  purposes  in 2001,  and a total gain of  $16,392,623  for federal tax
purposes in 2001.

     In recognition of the transfer of the  Frenchman's  Wharf II property,  the
net unamortized  amounts of acquisition fees and property purchase costs,  which
totaled  $56,217 as of December 31, 2000,  were  reclassified  to  investment in
partnerships  held for sale or transfer  in the  accompanying  balance  sheet at
December 31, 2000.

                                    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  noteholders.  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 partnership  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 notes.
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.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     On both May 31, 2001 and May 31,  2000,  pursuant to the option  agreement,
the noteholder  purchased a 26% interest in Princeton from the Partnership,  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 extraordinary  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 $1,781,710  and
$1,960,030 for federal tax purposes in 2001 and 2000, respectively.

     Due to the  impending  and  likely  transfer  of the  remaining  48% of the
Partnership's  investment  in  Princeton  over  the  next  two  years,  the  net
unamortized  amounts of acquisition fees and property  purchase costs related to
Princeton,  which totaled $15,154 as of June 30, 2001 and $23,362 as of December
31, 2000, have been  reclassified to investment in partnerships held for sale or
transfer in the accompanying balance sheets.

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

     On May 31, 2000, Rolling Green at Fall River sold its property.  The entire
net sale proceeds to the  Partnership  were used to pay off, at a discount,  the
Partnership's  purchase money note obligation  related to its investment in this
Local  Partnership.  The sale resulted in gain on  disposition  of investment in
partnerships of $3,542,933,  and in extraordinary  gain from  extinguishment  of
debt of $7,746,946 for financial  statement  purposes in 2000. The total federal
tax gain related to Rolling Green at Fall River was approximately  $16.8 million
in 2000. The Managing  General Partner of the Partnership  and/or its affiliates
did not receive any fees relating to the sale.

     On May 31, 2000, Rolling Green at Amherst sold its property. The entire net
sale  proceeds  to the  Partnership  were used to pay off,  at a  discount,  the
Partnership's  purchase money note obligation  related to its investment in this
Local  Partnership.  The sale resulted in gain on  disposition  of investment in
partnership of $2,336,845, and in extraordinary gain from extinguishment of debt
of $1,786,750  for financial  statement  purposes in 2000. The total federal tax
gain related to Rolling Green at Amherst was approximately $6.3 million in 2000.
The Managing  General Partner of the  Partnership  and/or its affiliates did not
receive any fees relating to the sale.

b.   Advances to Local Partnerships
     ------------------------------

     As of June 30, 2001 and  December 31, 2000,  the  Partnership  had advanced
funds  to Local  Partnerships  totaling  $150,000  and  $474,410,  respectively.
Accrued interest receivable on these advances was $0 and $187,372 as of June 30,
2001 and December 31, 2000,  respectively.  For  financial  reporting  purposes,
these loans have been reduced to zero by the  Partnership  as a result of losses
at the related Local Partnership level during prior years.

                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

     To cover operating  deficits  incurred in prior years for Frenchman's Wharf
II, the Partnerships  advanced funds totaling  $324,410 as of December 31, 2000.
Accrued interest receivable was $187,372 as of December 31, 2000. See Note 2.a.,
above,  concerning the transfer of the property related to Frenchman's  Wharf II
on June 22, 2001.

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

     The Managing  General  Partner and the local  managing  general  partner of
Posada Associates Limited  Partnership (Posada Vallarta  Apartments)  refinanced
the  property's  mortgage  loan  on  May  26,  1998.  In  connection  with  such
refinancing,  the  Partnership  advanced  the  Local  Partnership  $450,000  for
application  and rate lock fees. As of both June 30, 2001 and December 31, 2000,
$300,000 of the  advances  had been  repaid to the  Partnership.  For  financial
reporting  purposes,  the  remaining  advance  has been  reduced  to zero by the
Partnership as a result of losses at the related Local  Partnership level during
prior years.

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

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

     The Managing  General Partner and the local managing general partner (CRHC,
an affiliate of the Managing General Partner)  analyzed whether to refinance the
HUD Section 236 interest rate subsidized mortgage loan related to Chevy Chase or
to enter the  Mark-up-to-Market  program.  The local  managing  general  partner
agreed to HUD's analysis of the property and proposal for Mark-up-to-Market, and
the property has entered into the Mark-up-to-Market  program effective September
2000,  for a five year term,  subject to the annual  availability  of funding by
Congress.   HUD's  analysis  indicated  that  gross  rents  should  increase  by
approximately $475,000 per year.

                                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  covers  20% of the  property's
apartment units. The Local  Partnership has caused the Section 8 HAP contract to
be renewed periodically,  with the current renewal period expiring September 30,
2001. The Managing General Partner expects that this Section 8 HAP contract will
be renewed through May 2002, at which time the Local Partnership  intends to opt
out of the HAP program.

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

     The 1983 construction loan related to Orangewood Plaza, a 40-unit apartment
building in Orange Cove, California, was never formally converted to a permanent
loan. It is now  anticipated  that this loan will be  restructured  in 2001 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

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

consummated.  Accordingly,  there is no assurance that the  Partnership  will be
able to retain its  interest in  Orangewood  Plaza.  This  uncertainty  does not
adversely impact the Partnership's financial condition, as discussed above.

     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 will be used to pay in full the principal and accrued
interest on the acquisition note.

                                    Princeton
                                    ---------

     Princeton  defaulted on its project  subsidy  loan.  The maturity  date was
extended five years to January 1, 2004, as part of litigation  settled effective
January 1, 2000, when the Managing  General  Partner and the noteholder  entered
into an agreement  extending  the maturity  date of the purchase  money note, as
discussed above.

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

     On May 31, 2000,  Rolling  Green at Fall River and Rolling Green at Amherst
were sold. See Note 2.a. hereof for further information concerning these sales.

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

     Combined  statements of operations for the 14 and 15 Local  Partnerships in
which the Partnership  was invested as of June 30, 2001 and 2000,  respectively,
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 and 2000 include
information for the Local Partnerships through date of transfer or sale.

                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (Unaudited)



2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                        COMBINED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                   For the three months ended      For the six months ended
                                             June 30,                       June 30,
                                  ---------------------------     ---------------------------
                                      2001            2000            2001           2000
                                  ------------    -----------     -----------    ------------
<S>                               <C>            <C>             <C>             <C>
Revenue:
  Rental ......................   $  4,861,055   $  5,343,986    $  9,722,795    $ 11,275,440
  Other .......................        224,326        208,332         435,717         421,842
                                  ------------   ------------    ------------    ------------

    Total revenue .............      5,085,381      5,552,318      10,158,512      11,697,282
                                  ------------   ------------    ------------    ------------

Expenses:
  Operating ...................      2,650,317      2,944,474       5,640,518       6,653,546
  Interest ....................      1,428,188      1,680,011       2,856,379       3,360,022
  Depreciation and amortization        910,641      1,112,015       1,821,286       2,224,031
                                  ------------   ------------    ------------    ------------

    Total expenses ............      4,989,146      5,736,500      10,318,183      12,237,599
                                  ------------   ------------    ------------    ------------

Net income (loss) .............   $     96,235   $   (184,182)   $   (159,671)   $   (540,317)
                                  ============   ============    ============    ============
</TABLE>


     As of June 30, 2001 and 2000, the Partnership's  share of cumulative losses
to date for nine of the 14 and 15 Local Partnerships  exceeded the amount of the
Partnership's  investments  in and  advances  to  those  Local  Partnerships  by
$20,695,689  and  $25,127,919,  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.   AFFORDABLE HOUSING LEGISLATION

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

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


                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2001 and 2000

                                   (Unaudited)


3.   AFFORDABLE HOUSING LEGISLATION - Continued

     Country  Place II has a  Section 8 HAP  contract  which  covers  20% of the
property's  apartments  units,  which contract expires during 2001. The Managing
General Partner expects that this Section 8 HAP contract will be renewed through
May 2002,  at which  time the Local  Partnership  intends  to opt out of the HAP
program.

     With the  uncertainty  of continued  project-based  Section 8 subsidies for
properties  with expiring  Section 8 HAP  contracts,  there is no assurance that
rental  properties  with Section 8 HAP  contract  rents in excess of fair market
rents will be able to maintain the rental income and occupancy  levels necessary
to pay operating costs and debt service.  However, for the year 2001, the number
of apartment units with expiring  Section 8 subsidies is nominal and should have
little to no impact on the  Partnership's  investments in Local  Partnerships at
this time.  As of June 30, 2001,  the  Partnership's  remaining  investment in a
Local Partnership with a Section 8 HAP contract expiring in 2001 was $0.


4.   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 $47,278 and
$89,248 for the three and six month periods  ended June 30, 2001,  respectively,
and $44,016 and $93,873 for the three and six month periods ended June 30, 2000,
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.

     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 and
$124,998  for each of the three and six month  periods  ended June 30,  2001 and
2000.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than two percent of the sales price of an investment in a Local Partnership
or the property it owns,  payable under certain  conditions  upon the sale of an
investment in a Local  Partnership  or the property it owns.  The payment of the
fee is subject to certain  restrictions,  including the achievement of a certain
level of sales  proceeds and making  certain  minimum  distributions  to limited
partners.  No such  fees were  earned by the  Managing  General  Partner  or its
affiliates for the six month periods ended June 30, 2001 or 2000.



                                      # # #


                                      -11-

<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 one year.  Expiring  Section 8 HAP contracts  with rents that exceed
100% of fair market rents could be renewed for one year, but at rents reduced to
100% of fair market rents (Mark-to-Market). All expiring Section 8 HAP contracts
with rents exceeding comparable market rents, and properties with mortgage loans
insured by the  Federal  Housing  Administration  (FHA),  became  subject to the
Mark-to-Market legislation.

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

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

                                      -12-

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

     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  Interest Subsidy 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 rental revenues.

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

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

     The Partnership's liquidity, with unrestricted cash resources of $3,430,385
as of June 30, 2001, along with anticipated  future cash  distributions from the
Local  Partnerships,  is  expected  to be  adequate  to  meet  its  current  and
anticipated  operating cash needs. On May 2, 2001, the  Partnership  made a cash
distribution of $3,244,150  ($65 per Unit) to Additional  Limited  Partners,  to
holders  of record as of April 1,  2001.  As of August 6,  2001,  there  were no
material commitments for capital expenditures.

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the form of purchase money notes having an aggregate principal
balance of $1,900,000 plus aggregate  accrued  interest of $2,912,809 as of June
30, 2001,  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 maturity  dates of the purchase  money notes  related to the  following
properties were extended during 2000.

                                           Original         Extended
         Property        Principal         Maturity         Maturity
         --------       ----------         --------         --------

         Princeton      $  500,000         01/01/99         01/01/04
         Westgate       $1,400,000 (1)     09/01/98         09/01/03

     (1)  Remaining principal after a partial payment.


                                      -13-

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

     The purchase money notes related to the following  properties were paid off
at a discount,  or the  collateral  that  secured  them was  transferred  to the
noteholder(s), during 2000 or 2001.

         Property                      Principal       Date       Disposition
         --------                      ---------      --------    -----------

         Rolling Green at Amherst     $1,927,500      May 2000      Paid Off
         Rolling Green at Fall River  $4,600,000      May 2000      Paid Off
         Frenchman's Wharf II         $3,150,000      June 2001     Transferred

     See the notes to financial  statements contained in Part I, Item 1, hereof,
for additional information concerning these purchase money notes.

     The purchase money notes,  which are  nonrecourse to the  Partnership,  are
generally  secured  by  the  Partnership's  interest  in  the  respective  Local
Partnerships.  There is no assurance  that the underlying  properties  will have
sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes'  principal and accrued  interest when due. If a purchase money note
is not paid in accordance with its terms,  the  Partnership  will either have to
renegotiate  the terms of repayment or risk losing its  partnership  interest in
the  respective  Local  Partnership.  In the event  that a  purchase  money note
remains unpaid upon maturity,  the noteholder may have the right to foreclose on
the Partnership's interest in the related Local Partnerships.  In the event of a
foreclosure, the excess of the nonrecourse indebtedness over the carrying amount
of the Partnership's investment in the related Local Partnership would be deemed
cancellation of indebtedness  income, which would be taxable to Limited Partners
at a  federal  tax  rate  of  up to  39.6%.  Additionally,  in  the  event  of a
foreclosure,  the Partnership would lose its investment in the Local Partnership
and,  likewise,  its  share of any  future  cash flow  distributed  by the Local
Partnership from rental operations,  mortgage debt refinancings,  or the sale of
the real estate.

     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  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 efforts
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,  2001 and  2000,  the  receipt  of
distributions  from Local  Partnerships  was adequate to support  operating cash
requirements.  Cash and cash  equivalents  decreased during the six month period
ended June 30, 2001,  due  primarily to a  distribution  to  Additional  Limited
Partners  made on May 2,  2001.  However,  the  receipt  of  distributions  from
partnerships exceeded net cash used in operating activities.

                                      -14-

<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 income for the three  month  period  ended June 30,
2001,  decreased from the corresponding  period in 2000 primarily due to gain on
disposition  of  investments  in  partnerships  and   extraordinary   gain  from
extinguishment  of debt  related to the sales of Roberts  Fall River  Associates
(Rolling Green at Fall River) and Roberts Amherst  Associates  (Rolling Green at
Amherst) in 2000,  which were larger than the  corresponding  amounts related to
the transfer of Frenchman's  Wharf II in 2001.  Contributing  to the decrease in
the Partnership's net income were a decrease in interest revenue received due to
lower cash and cash  equivalent  balances and lower interest rates in 2001 and a
decrease in share of income from  partnerships.  Offsetting  the decrease in the
Partnership's  net income was a decrease  in interest  expense  related to lower
purchase money note balances.

     The  Partnership's net income for the six month period ended June 30, 2001,
decreased  from  the  corresponding  period  in  2000  primarily  due to gain on
disposition  of  investments  in  partnerships  and   extraordinary   gain  from
extinguishment  of debt, as discussed  above.  Contributing to the decrease were
lower  interest  revenue,  as  discussed  above,  and an increase in general and
administrative  expense related to higher reimbursed  payroll costs.  Offsetting
the decrease in the Partnership's net income were a decrease in interest expense
and  amortization  of  deferred  costs  associated  with the sale or transfer of
properties,  lower  professional  fees due to a decrease in legal  fees,  and an
increase in share of income from  partnerships.  The increase in share of income
from partnerships is generally related to higher  distributions  received at two
properties,  income  recognized at another  property which had  previously  been
excluded  due to  unallowable  losses,  and the  exclusion  of  loss at  another
property in which the Partnership has reduced its investment to zero.  Partially
offsetting the increase in share of income from  partnerships  was the offset of
the  Partnership's  additional  investment in Orangewood  Plaza,  by unallowable
losses.

     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, 2001 did not include  losses of $251,841  and
$523,785, respectively, compared to excluded losses of $272,321 and $743,301 for
the three and six month periods ended June 30, 2000, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during this period.


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

     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 certain
purchase money notes.


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

     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.

                                      -15-

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

                                  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.

     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 Capital Realty  Investors-II
Limited  Partnership  ("CRI-II") may have received an unregistered  tender offer
from Peachtree  Partners 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  Partners  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.  Lexington is  unaffiliated  with the  Partnership or the
Managing  General  Partner.  The  price  offered  was  determined  solely at the
discretion of Lexington and does not necessarily represent the fair market value
of each Unit.

     In response to the Lexington  tender offer,  on July 5, 2001,  the Managing
General  Partner filed a Schedule 14D-9.  In that filing,  the Managing  General
Partner  recommended that Limited Partners reject the Lexington offer because it
viewed the offer price as inadequate.

     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.  For the  calendar  year 2001 to August 6, 2001,
Units  transferred  have  not  exceeded  4.9% of the  total  outstanding  Units,
therefore, the Partnership has not halted recognition of transfers.

                               Cash distributions
                               ------------------

     On May 2, 2001, the Partnership made a cash distribution of $3,244,150 ($65
per Unit) to Additional Limited Partners, who were holders of record as of April
1, 2001.

                                      -16-

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

     a.   None

     b.   A report on Form 8-K was  dated  March 13,  2001,  and filed  April 3,
          2001; the report  discussed an unregistered  tender offer initiated by
          Bond Purchase,  L.L.C. on March 13, 2001. See Part II, Item 5, hereof,
          for additional information concerning the tender offer.

          A Report on Form 8-K was dated May 10,  2001,  and filed May 24, 2001;
          the  report  discussed  an  unregistered  tender  offer  initiated  by
          Peachtree  Partners  on or about May 10,  2001.  See Part II,  Item 5,
          hereof, for additional information concerning the tender offer.

          All other items are not applicable.

                                      -17-

<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 6, 2001                      by:  /s/ Michael J. Tuszka
--------------                           ---------------------------------------
DATE                                      Michael J. Tuszka
                                            Vice President
                                            and Chief Accounting Officer
                                            (Principal Financial Officer
                                             and Principal Accounting Officer)

                                      -18-

<PAGE>