<PAGE>

                                   FORM 10-QSB
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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


For the quarterly period ended     March 31, 2000
                                   --------------


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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP
--------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)




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



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



                                 (301) 468-9200
--------------------------------------------------------------------------
                (Issuer's telephone number, including area code)


     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, and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X]   No [ ]

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.


     Not applicable                            Not applicable
--------------------------         ---------------------------------------
        (Class)                       (Outstanding at March 31, 2000)
<PAGE>


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                      FOR THE QUARTER ENDED MARCH 31, 2000



                                                            PAGE
                                                            ----

PART I.   Financial Information

Item 1.   Financial Statements

          Balance Sheets - March 31, 2000 and
            December 31, 1999 . . . . . . . . . . . . .         1

          Statements of Operations and Accumulated Losses
            - for the three months ended March 31, 2000
            and 1999  . . . . . . . . . . . . . . . . .         2

          Statements of Cash Flows - for the three
            months ended March 31, 2000 and 1999  . . .         3

          Notes to Financial Statements - March 31, 2000
            and 1999  . . . . . . . . . . . . . . . . .         4

Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations . . . .        21


PART II.  Other Information

Item 3.   Defaults Upon Senior Securities . . . . . . .        26

Item 5.   Other Information . . . . . . . . . . . . . .        26

Item 6.   Exhibits and Reports on Form 8-K  . . . . . .        26

Signature   . . . . . . . . . . . . . . . . . . . . . .        27

Exhibit Index . . . . . . . . . . . . . . . . . . . . .        28
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 1.   FINANCIAL STATEMENTS
          ---------------------

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                                                                    March 31,     December 31,
                                                                                                      2000           1999
                                                                                                   ------------   ------------
                                                                                                    (Unaudited)
<S>                                                                                                <C>            <C>
Investments in and advances to partnerships                                                        $    811,695   $    966,378
Investment in partnerships held for sale                                                                196,986             --
Cash and cash equivalents                                                                             7,950,149      8,936,520
Acquisition fees, principally paid to related parties, net of
  accumulated amortization of $315,013 and $408,934, respectively                                       260,409        348,795
Property purchase costs, net of accumulated amortization of
  $249,024 and $280,099, respectively                                                                   217,247        252,283
Other assets                                                                                              1,272             --
                                                                                                   ------------   ------------

     Total assets                                                                                  $  9,437,758   $ 10,503,976
                                                                                                   ============   ============

                        LIABILITIES AND PARTNERS' DEFICIT

Due on investments in partnerships                                                                 $  7,348,747   $  7,348,747
Accrued interest payable                                                                             22,649,942     22,374,877
Distribution payable                                                                                         --      1,622,237
Accounts payable and accrued expenses                                                                    75,610        127,692
                                                                                                   ------------   ------------
     Total liabilities                                                                               30,074,299     31,473,553
                                                                                                   ------------   ------------

Commitments and contingencies

Partners' capital (deficit):

  Capital paid in:
    General Partners                                                                                      2,000          2,000
    Limited Partners                                                                                 50,015,000     50,015,000
                                                                                                   ------------   ------------
                                                                                                     50,017,000     50,017,000

  Less:
    Accumulated distributions to partners                                                            (6,072,409)    (6,072,409)
    Offering costs                                                                                   (5,278,980)    (5,278,980)
    Accumulated losses                                                                              (59,302,152)   (59,635,188)
                                                                                                   ------------   ------------
      Total partners' deficit                                                                       (20,636,541)   (20,969,577)
                                                                                                   ------------   ------------
      Total liabilities and partners' deficit                                                      $  9,437,758   $ 10,503,976
                                                                                                   ============   ============
</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
                                                                                                             March 31,
                                                                                                   -----------------------------
                                                                                                       2000           1999
                                                                                                   ------------   ------------
<S>                                                                                                <C>            <C>
Share of income from partnerships                                                                  $    652,260   $  1,545,651
                                                                                                   ------------   ------------
Other revenue and expenses:

  Revenue:
    Interest income                                                                                     107,533         77,182
                                                                                                   ------------   ------------
  Expenses:
    Interest                                                                                            275,065        430,303
    Management fee                                                                                       62,499         62,499
    General and administrative                                                                           53,162         62,621
    Professional fees                                                                                    25,281         19,348
    Amortization of deferred costs                                                                       10,750         11,444
                                                                                                   ------------   ------------
                                                                                                        426,757        586,215
                                                                                                   ------------   ------------
       Total other revenue and expenses                                                                (319,224)      (509,033)
                                                                                                   ------------   ------------

Income before extraordinary gain from extinguishment of debt                                            333,036      1,036,618

Extraordinary gain from extinguishment of debt                                                               --        524,994
                                                                                                   ------------   ------------

Net income                                                                                              333,036      1,561,612

Accumulated losses, beginning of period                                                             (59,635,188)   (72,713,687)
                                                                                                   ------------   ------------
Accumulated losses, end of period                                                                  $(59,302,152)  $(71,152,075)
                                                                                                   ============   ============
Net income allocated to General Partners (1.51%)                                                   $      5,029   $     23,580
                                                                                                   ============   ============
Net income allocated to Initial and Special Limited Partners (1.49%)                               $      4,962   $     23,268
                                                                                                   ============   ============
Net income allocated to Additional Limited Partners (97%)                                          $    323,045   $  1,514,764
                                                                                                   ============   ============
Net income per unit of Additional Limited Partner Interest
  based on 50,000 units outstanding                                                                $       6.46   $      30.30
                                                                                                   ============   ============
</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 three months ended
                                                                                                             March 31,
                                                                                                   -----------------------------
                                                                                                       2000           1999
                                                                                                   -----------    -----------
<S>                                                                                                <C>            <C>
Cash flows from operating activities:
  Net income                                                                                       $   333,036    $ 1,561,612

  Adjustments to reconcile net income to net cash
    used in operating activities:
    Share of income from partnerships                                                                 (652,260)    (1,545,651)
    Amortization of deferred costs                                                                      10,750         11,444
    Extraordinary gain from extinguishment of debt                                                          --       (524,994)

    Changes in assets and liabilities:
      Increase in other assets                                                                          (1,272)        (3,388)
      Increase in accrued interest payable                                                             275,065        430,303
      Decrease in accounts payable and accrued expenses                                                (52,082)       (37,519)
                                                                                                   -----------    -----------
        Net cash used in operating activities                                                          (86,763)      (108,193)
                                                                                                   -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships                                                           722,629      3,734,355
  Advances made to local partnerships                                                                       --       (120,642)
                                                                                                   -----------    -----------
        Net cash provided by investing activities                                                      722,629      3,613,713
                                                                                                   -----------    -----------

Cash flows from financing activities:
  Payoff of purchase money notes and related interest                                                       --     (1,085,000)
  Payment of purchase money note principal                                                                  --     (2,691,176)
  Distribution to Additional Limited Partners                                                       (1,622,237)            --
                                                                                                   -----------    -----------
        Net cash used in financing activities                                                       (1,622,237)    (3,776,176)
                                                                                                   -----------    -----------
Net decrease in cash and cash equivalents                                                             (986,371)      (270,656)

Cash and cash equivalents, beginning of period                                                       8,936,520      7,596,031
                                                                                                   -----------    -----------
Cash and cash equivalents, end of period                                                           $ 7,950,149    $ 7,325,375
                                                                                                   ===========    ===========

Supplemental disclosure of cash flow information:
  Cash paid during the period for interest                                                         $        --    $   244,822
                                                                                                   ===========    ===========
</TABLE>

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

                                      -3-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (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 March 31, 2000, and the results of its operations and its cash flows for the
three months ended March 31, 2000 and 1999.  The results of operations for the
interim period ended March 31, 2000, are not necessarily indicative of the
results to be expected for the full year.

     The accompanying unaudited financial statements have been prepared in
accordance 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 accordance 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, 1999.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

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

     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 $7,348,747 plus aggregate accrued interest of $22,649,942 as of March
31, 2000, are payable in full upon the earliest of:  (1) sale or refinancing of
the respective Local Partnership's rental property; (2) payment in full of the
respective Local Partnership's permanent loan; or (3) maturity.  Purchase money
notes in the principal amounts of $1,050,000 and $950,000 matured on December
31, 1996 and 1997, respectively, and were extended to January 5, 2001, but were
paid off, at a discount, on September 30, 1999.  Purchase money notes in the
aggregate principal amount of $2,380,000 matured on January 1, 1998, and were
written off on October 5, 1999 when the related local partnership interests,
held by the Partnership, were transferred to the noteholders in full
satisfaction of the purchase money notes' principal and accrued interest.  A
purchase money note in the principal amount of $3,150,000 matured on June 1,
1998, and has not been paid or extended.  Purchase money notes in the original
principal amounts of $4,600,000 and $1,927,500 matured on August 31, 1998, were
partially paid down, with the balances extended to August 31, 2003.  A purchase
money note in the principal amount of $1,450,000 matured on September 1, 1998,
and has not been paid or extended.  Purchase money notes in the aggregate
principal amount of $840,178 matured on January 1, 1999 and were paid off, at a
discount, on February 5, 1999.  A purchase money note in the principal amount of
$500,000 matured on January 1, 1999 and has been extended to January 1, 2004, as
discussed below.

     The purchase money notes, which are nonrecourse to the Partnership, are
generally secured by the Partnership's interest in the respective Local
Partnerships.  There is no assurance that the underlying properties will have

                                       -4-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

sufficient appreciation and equity to enable the Partnership to pay the purchase
money notes' principal and accrued interest when due.  If a purchase money note
is not paid in accordance with its terms, the Partnership will either have to
renegotiate the terms of repayment or risk losing its partnership interest in
the respective Local Partnership.  The Partnership's inability to pay certain of
the purchase money note principal and accrued interest balances when due, and
the resulting uncertainty regarding the Partnership's continued ownership
interest in the related Local Partnerships, does not adversely impact the
Partnership's financial condition because the purchase money notes are
nonrecourse and secured solely by the Partnership's interest in the related
Local Partnerships.  Therefore, should the investment in any of the Local
Partnerships with maturing purchase money notes not produce sufficient value to
satisfy the related purchase money notes, the Partnership's exposure to loss is
limited because the amount of the nonrecourse indebtedness of each of the
maturing purchase money notes exceeds the carrying amount of the investment in,
and advances to, each of the related Local Partnerships.  Thus, even a complete
loss of the Partnership's interest in one of these Local Partnerships would not
have a material adverse impact on the financial condition of the Partnership.
See further discussion of certain purchase money notes, below.

     The following chart presents information related to purchase money notes
which have matured through March 31, 2000, and which remain unpaid or unextended
as of May 10, 2000.  Excluded from the following chart are purchase money notes
which matured through March 31, 2000, and which have been paid off, cancelled,
or extended on or before May 10, 2000.




























                                       -5-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>


                                                                                                    Carrying Amount
                                                                           Aggregate                of Partnership's
                                                Aggregate                  Accrued                   Investment in
                    Number of                   Principal                  Interest                 and Advances to
    Purchase        Underlying                   Balance                   Balance                  Underlying Local
   Money Note         Local       Percentage   as of March   Percentage  as of March    Percentage  Partnerships as    Percentage
 (PMN) Maturity    Partnerships    of Total      31, 2000     of Total    31, 2000       of Total   March 31, 2000      of Total
----------------   ------------   ----------   -----------   ----------  -------------  ----------  ----------------   ----------
<S>                <C>            <C>          <C>           <C>         <C>            <C>         <C>                <C>
2nd Quarter 1998        1               6%     $ 3,150,000         43%    $ 5,707,059        25%               --           --
3rd Quarter 1998        1               6%       1,450,000         20%      2,163,887        10%       $  715,275           88%
                      ----          -----      -----------      -----     -----------     -----        ----------        -----
                        2              12%     $ 4,600,000         63%    $ 7,870,946        35%       $  715,275           88%
                      ====          =====      ===========      =====     ===========     =====        ==========        =====

Total, Local
  Partnerships         17             100%     $ 7,348,747        100%    $22,649,942       100%       $  811,695          100%
                      ====          =====      ===========      =====     ===========     =====        ==========        =====

</TABLE>

     The Managing General Partner is continuing to investigate possible
alternatives to reduce the Partnership's debt obligations.  These alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note requirements, paying off certain purchase money notes at a
discounted price, extending the due dates of certain purchase money notes,
refinancing the respective properties' underlying debt or selling the underlying
real estate and using the Partnership's share of the proceeds to pay or buy down
certain purchase money note obligations.  Although the Managing General Partner
has had some success applying these strategies in the past, the Managing General
Partner cannot assure that these strategies will be successful in the future.
If the Managing General Partner is unable to negotiate an extension or
discounted payoff, upon maturity of the purchase money notes, in the event that
the purchase money notes remain unpaid, the noteholders may have the right to
foreclose on the Partnership's interest in the related Local Partnerships.  In
the event of a foreclosure, the excess of the nonrecourse indebtedness over the
carrying amount of the Partnership's investment in the related Local Partnership
would be deemed cancellation of indebtedness income which would be taxable to
Limited Partners at a federal tax rate of up to 39.6%.  Additionally, in the
event of a foreclosure, the Partnership would lose its investment in the Local
Partnership and, likewise, its share of any future cash flow distributed by the
Local Partnership from rental operations, mortgage debt refinancings, or the
sale of the real estate.  Of the 17 Local Partnerships in which the Partnership
is invested as of March 31, 2000, the two Local Partnerships with associated
purchase money notes which have matured and which remain unpaid or unextended as
of May 10, 2000, represented the following percentages of the Partnership's
total distributions received from Local Partnerships and share of income from
Local Partnerships for the immediately preceding two calendar years.

                                       -6-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>


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


</TABLE>

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

     Interest expense on the Partnership's purchase money notes was $275,065 and
$430,303 for the three months ended March 31, 2000 and 1999, respectively.  The
accrued interest payable on the purchase money notes of $22,649,942 and
$22,374,877 as of March 31, 2000 and December 31, 1999, 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.

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

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

     Under the extension agreement, documents transferring the Partnership's
interests in Beech Hill I and Beech Hill II to the noteholders were placed in
escrow to be released to the noteholders upon a future default by the
Partnership on the respective purchase money notes.  On January 1, 1998, the

                                       -7-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

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

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

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

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

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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

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

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

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

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

     The Partnership defaulted on its purchase money notes related to
Frenchman's Wharf Associates II Limited Partnership (Frenchman's Wharf II) on
June 1, 1998 when the notes matured and were not paid.  The default amount
included principal and accrued interest of $3,150,000 and $5,071,731,
respectively.  As of May 10, 2000, principal and accrued interest totaling
$3,150,000 and $5,744,454, respectively, were due.  The purchase money notes
were initially due to mature on June 1, 1988, but were extended to mature on
June 1, 1998.  The Partnership requested another extension of the maturity date
of the purchase money notes until May 2000, to be coterminous with the
expiration of the Local Partnership's provisional workout agreement with HUD
related to its mortgage loan.  In 1996, HUD sold the mortgage loan to a third
party lender.  The local managing general partner has had several conversations
with the lender regarding the upcoming maturity of the workout.  There is no
assurance these discussions will achieve a resolution of the issue, and it is

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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

possible the lender will initiate a foreclosure action.  As of May 10, 2000, the
local managing general partner is still awaiting a response from the purchase
money noteholders and the lender.

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

                                    Princeton
                                    ---------

     The Partnership defaulted on its purchase money note related to Princeton
Community Village Associates (Princeton) on January 1, 1999 when the note
matured and was not paid.  The default amount included principal and accrued
interest of $500,000 and $1,422,064, respectively.  On August 9, 1999, the
noteholder filed a complaint seeking declaratory judgment that the Partnership
has forfeited its interest in Princeton to the noteholders.  The 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 is to be applied against accrued interest
payable on the purchase money note.

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

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

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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

the respective Local Partnerships, as well as all net cash flow payable to the
Partnership from the respective Local Partnerships in excess of $10,000 per
year, shall be applied to the balance of the respective purchase money notes,
and further agreed to waive certain rights granted in the respective Local
Partnerships' limited partnership agreements.  The mortgage loan on Rolling
Green at Fall River was refinanced in March 1999; refinancing proceeds of
$2,725,257 were used to pay down purchase money note principal and capitalized
interest in March 1999.  The mortgage loan on Rolling Green at Amherst was
refinanced in August 1998; refinancing proceeds of $1,503,496 were used to pay
down purchase money note principal and capitalized interest in 1998.  The local
managing general partner has received an offer for the purchase of the property
and the parties have executed a sales contract dated as of February 18, 2000.
See Note 2.c. for further information concerning this sale.

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

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

                                    Westgate
                                    --------

     In June, 1998, the holder of the purchase money note related to Westgate
Tower Limited Dividend Housing Associates (Westgate) accepted the Managing
General Partner's offer to extend the maturity date of the purchase money note
for five years from its scheduled maturity date of September 1, 1998.  However,
the noteholder has since refused to execute the documentation formally extending
the maturity date.  As of May 10, 2000, principal and accrued interest of
$1,450,000 and $2,177,971, respectively, were due.  In December, 1998, the
noteholder's attorney notified the Managing General Partner of its position,
which the Managing General Partner disputes, that the noteholder's prior
agreement to extend the maturity date is not binding on the noteholder.  The
noteholder has since agreed to execute the documentation formally extending the
maturity date, but as of May 10, 2000, has not yet done so.  The Managing
General Partner is prepared to vigorously defend its position that the agreement
to extend the maturity date for five years is binding on the noteholder.  There
is no assurance that the parties will be able to settle this dispute or that the
Partnership would prevail in any resulting litigation if a settlement is not
reached.  Accordingly, there can be no assurance that the Partnership will be
able to retain its interest in the Local Partnership.  The uncertainty about the
continued ownership of the Partnership's interest in the related Local
Partnership does not adversely impact the Partnership's financial condition, as
discussed above.


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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

     The Partnership defaulted on its three purchase money notes relating to
Wexford Ridge Associates (Wexford Ridge) on December 31, 1997 when the notes
matured and were not paid.  The aggregate default amount included principal and
accrued interest of $1,900,000 and $3,478,549, respectively.  The Managing
General Partner successfully negotiated an extension on one of the purchase
money notes (First Wexford Note) in the principal amount of $950,000 effective
April 9, 1998; the First Wexford Note was paid off, at a discount, on September
30, 1999.  The discounted payoff resulted in extraordinary gain from
extinguishment of debt of approximately $2.4 million in 1999.  The discounted
payoff also resulted in cancellation of indebtedness income of approximately
$2.4 million for federal tax purposes in 1999.

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

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

     As of both March 31, 2000 and December 31, 1999, the Partnership had
advanced funds to Local Partnerships totaling $474,410.  Interest accrued on
these advances was $187,372 as of both March 31, 2000 and December 31, 1999.
For financial reporting purposes, these loans have been reduced to zero by the
Partnership as a result of losses from the related Local Partnerships.




                                      -12-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (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 Partnership advanced funds totaling $324,410 as of both March 31, 2000
and December 31, 1999.  No advances have been made to Frenchman's Wharf II since
March 1987, and the Partnership does not expect to advance any additional funds
to the Local Partnership.  These loans, together with accrued interest of
$187,372 as of both March 31, 2000 and December 31, 1999, are payable from cash
flow of Frenchman's Wharf II after payment of first mortgage debt service and
after satisfaction by the Partnership of certain other interest obligations on
the purchase money notes relating to the Local Partnership.  No interest has
been accrued since 1992 due to the uncertainty of future collection.  There is
no assurance that the Local Partnership, upon expiration of the workout of its
mortgage loan, will be able to repay the loans in accordance with the terms
thereof.  For financial reporting purposes, these loans have been reduced to
zero by the Partnership as a result of losses at the Local Partnership level
during prior years.

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

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

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

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

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





                                      -13-
<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

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

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

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

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

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

                                    Princeton
                                    ---------

     Princeton Community Village Associates (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.


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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

     The local managing general partner of Roberts Amherst Associates (Rolling
Green at Amherst) has received an offer for the purchase of the property, and
the parties have executed a sales contract dated as of February 18, 2000, with a
projected closing date in June, 2000.  Proceeds received by the Partnership from
the sale of this property would be used to pay off, at a discount, the purchase
money notes related to Rolling Green at Amherst.  The contract is subject to
customary contingencies.  Accordingly, there is no assurance that a sale or a
payoff of the purchase money notes will occur.  In the event of a sale of this
property, the Partnership's investments in and advances to partnerships would be
reduced accordingly.  Of the Local Partnerships in which the Partnership was
invested as of March 31, 2000 and December 31, 1999, Rolling Green at Amherst
represented approximately 6% and 6%, respectively, of the total investments in
and advances to partnerships.  For the calendar years ended December 31, 1999
and 1998, distributions from Rolling Green at Amherst represented approximately
2% and 0%, respectively, of total distributions from Local Partnerships.  The
Partnership's share of income from Rolling Green at Amherst was $0 and $6,844
for the three months ended March 31, 2000 and 1999, respectively.

     Due to the impending and likely sale of the property related to the
Partnership's investment in Rolling Green at Amherst, the investment in and
advances to partnerships plus net unamortized amounts of acquisition fees and
property purchase costs related to Rolling Green at Amherst, which totaled
$123,740, have been reclassified to investment in partnerships held for sale in
the accompanying balance sheet at March 31, 2000.

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

     The mortgage loan on Rolling Green at Fall River was refinanced in March
1999; refinancing proceeds of $2,725,257 were used to pay down purchase money
note principal and capitalized interest in March 1999.  See the discussion above
for additional information concerning this refinancing and pay down.

     The local managing general partner of Roberts Fall River Associates
(Rolling Green at Fall River) has received an offer for the purchase of the
property, and the parties have executed a sales contract dated as of February
18, 2000, with a projected closing date in June, 2000.  Proceeds received by the
Partnership from the sale of this property would be used to pay off, at a
discount, the purchase money notes related to Rolling Green at Fall River.  The
contract is subject to customary contingencies.  Accordingly, there is no
assurance that a sale or a payoff of the purchase money notes will occur.  In
the event of a sale of this property, the Partnership's investments in and
advances to partnerships would be reduced accordingly.  Of the Local
Partnerships in which the Partnership was invested as of March 31, 2000 and
December 31, 1999, Rolling Green at Fall River represented approximately 0% and
3%, respectively, of the total investments in and advances to partnerships.  For
the calendar years ended December 31, 1999 and 1998, distributions from Rolling
Green at Fall River represented approximately 1% and 2%, respectively, of total
distributions from Local Partnerships.  The Partnership's share of income from

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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

Rolling Green at Fall River was $28,452 and $9,316 for the three months ended
March 31, 2000 and 1999, respectively.

     Due to the impending and likely sale of the property related to the
Partnership's investment in Rolling Green at Fall River, the net unamortized
amounts of acquisition fees and property purchase costs related to Rolling Green
at Fall River, which totaled $73,246, have been reclassified to investment in
partnerships held for sale in the accompanying balance sheet at March 31, 2000.

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

     Combined statements of operations for the 17 and 20 Local Partnerships in
which the Partnership is invested as of March 31, 2000 and 1999, respectively,
follow.  The combined statements have been compiled from information supplied by
the management agents of the projects and are unaudited.


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

                                                For the three months ended
                                                         March 31,
                                               -----------------------------
                                                   2000             1999
                                               ------------     ------------
        <S>                                    <C>              <C>
        Revenue:
          Rental                               $  5,931,454     $  6,550,834
          Other                                     213,510          337,527
                                               ------------     ------------
            Total revenue                         6,144,964        6,888,361
                                               ------------     ------------
        Expenses:
          Operating                               3,709,072        4,343,965
          Interest                                1,680,011        1,624,336
          Depreciation and amortization           1,112,016        1,213,666
                                               ------------     ------------
            Total expenses                        6,501,099        7,181,967
                                               ------------     ------------
        Net loss                               $   (356,135)    $   (293,606)
                                               ============     ============
</TABLE>

     As of March 31, 2000 and 1999, the Partnership's share of cumulative losses
to date for 11 and 12, respectively, of the 17 and 20 Local Partnerships,
respectively, exceeded the amount of the Partnership's investments in and
advances to those Local Partnerships by $25,410,195 and $23,952,567,
respectively.  As the Partnership has no further obligation to advance funds or
provide financing to these Local Partnerships, the excess losses have not been

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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

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

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























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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


3.   AFFORDABLE HOUSING LEGISLATION - Continued

<TABLE>
<CAPTION>

                                                  Units Authorized for            Original                    Renewed
                                 Number of       Rental Assistance Under    Expiration of Section 8     Expiration of Section 8
Property                        Rental Units           Section 8                 HAP Contract                HAP Contract
--------                        ------------     -----------------------    -----------------------     -----------------------
<S>                             <C>              <C>                        <C>                         <C>
Chevy Chase                         232                    228                    03/23/98                   09/22/00 (1)
Country Place II                    120                     24                    08/29/00                     (1)
Four Winds West                      62                     62                    04/14/98                   10/14/00 (1)
Frenchman's Wharf II                324                     31                    11/30/98                   11/30/00 (1)
Princeton Community Village         239                     26                    07/01/98                   10/01/24
Troy Manor                           50                     50                    10/29/99                   10/29/00 (1)
                                  -----                    ---
     Total                        1,027                    421
                                  =====                    ===

</TABLE>

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

     With the uncertainty of continued project-based Section 8 subsidies for
properties with expiring HAP contracts, there is no assurance that these rental
properties will be able to maintain the rental income and occupancy levels
necessary to pay operating costs and debt service.  As a result, it is not
possible to predict the impact on the Local Partnerships' operations and the
resulting impact on the Partnership's investments in the Local Partnerships at
this time.  As of March 31, 2000, the Partnership's investments in and advances
to Local Partnerships with Section 8 HAP contracts expiring in 2000 was $96,187.

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











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

                          NOTES TO FINANCIAL STATEMENTS

                             March 31, 2000 and 1999

                                   (Unaudited)


3.   AFFORDABLE HOUSING LEGISLATION - Continued

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


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 managing the Partnership.  For the three month periods ended March 31, 2000
and 1999, the Partnership paid $49,857 and $44,356, respectively, 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 (the Management Fee), after all other expenses of the Partnership are paid.
For each of the three month periods ended March 31, 2000 and 1999, the Part-
nership paid the Managing General Partner a Management Fee of $62,499.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than 2% of the sales price of an investment in a Local Partnership or the
property it owns, payable under certain conditions upon the sale of an
investment in a Local Partnership or the property it owns.  The payment of the
fee is subject to certain restrictions, including the achievement of a certain
level of sales proceeds and making certain minimum distributions to limited
partners.  No such fees were earned by the Managing General Partner or its
affiliates for the three months ended March 31, 2000 or 1999.





















                                      -19-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS
               -----------------------------------

     Capital Realty Investors-II Limited Partnership's (the Partnership)
Management's Discussion and Analysis of Financial Condition and Results of
Operations section contains information that may be considered forward looking,
including statements regarding the effect of governmental regulations.  Actual
results may differ materially from those described in the forward looking
statements and will be affected by a variety of factors including national and
local economic conditions, the general level of interest rates, terms of
governmental regulations that affect 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 been working to
develop strategies to sell or refinance certain properties pursuant to programs
developed by these agencies.  These programs may include opportunities to sell a
property to a qualifying purchaser who would agree to maintain the property as
low to moderate income housing in perpetuity, or to refinance a property, or to
obtain supplemental financing.  The Managing General Partner continues to
monitor certain state housing agency programs, and/or programs provided by
certain lenders, to ascertain whether the properties would qualify within the
parameters of a given program and whether these programs would provide an
appropriate economic benefit to the limited partners of the Partnership.

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

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










                                      -20-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS - Continued
               -----------------------------------

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

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

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

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

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

     The Partnership's liquidity, with unrestricted cash resources of $7,950,149
and $8,936,520 as of March 31, 2000 and December 31, 1999, respectively, 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 May 10, 2000, there were no material commitments for capital
expenditures.

     The Partnership's obligations with respect to its investments in Local
Partnerships, in the form of purchase money notes having an aggregate principal
balance of $7,348,747 plus aggregate accrued interest of $22,649,942 as of March
31, 2000, are payable in full upon the earliest of:  (1) sale or refinancing of
the respective Local Partnership's rental property; (2) payment in full of the

                                      -21-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS - Continued
               -----------------------------------

respective Local Partnership's permanent loan; or (3) maturity.  Purchase money
notes in the principal amounts of $1,050,000 and $950,000 matured on December
31, 1996 and 1997, respectively, and were extended to January 5, 2001, but were
paid off, at a discount, on September 30, 1999.  Purchase money notes in the
aggregate principal amount of $2,380,000 matured on January 1, 1998, and were
written off on October 5, 1999 when the related local partnership interests,
held by the Partnership, were transferred to the noteholders in full
satisfaction of the purchase money notes' principal and accrued interest.  A
purchase money note in the principal amount of $3,150,000 matured on June 1,
1998, and has not been paid or extended.  Purchase money notes in the original
principal amounts of $4,600,000 and $1,927,500 matured on August 31, 1998, were
partially paid down, with the balances extended to August 31, 2003.  A purchase
money note in the principal amount of $1,450,000 matured on September 1, 1998,
and has not been paid or extended.  Purchase money notes in the aggregate
principal amount of $840,178 matured on January 1, 1999 and were paid off, at a
discount, on February 5, 1999.  A purchase money note in the principal amount of
$500,000 matured on January 1, 1999 and has been extended to January 1, 2004.
See the notes to the financial statements for additional information concerning
these purchase money notes.

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

     The following chart presents information related to purchase money notes
which have matured through March 31, 2000, and which remain unpaid or unextended
as of May 10, 2000.  Excluded from the following chart are purchase money notes
which matured through March 31, 2000, and which have been paid off, cancelled,
or extended on or before May 10, 2000.










                                      -22-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS - Continued
               -----------------------------------

<TABLE>
<CAPTION>


                                                                                                    Carrying Amount
                                                                           Aggregate                of Partnership's
                                                Aggregate                  Accrued                   Investment in
                    Number of                   Principal                  Interest                 and Advances to
    Purchase        Underlying                   Balance                   Balance                  Underlying Local
   Money Note         Local       Percentage   as of March   Percentage  as of March    Percentage  Partnerships as    Percentage
 (PMN) Maturity    Partnerships    of Total      31, 2000     of Total    31, 2000       of Total   March 31, 2000      of Total
----------------   ------------   ----------   -----------   ----------  -------------  ----------  ----------------   ----------
<S>                <C>            <C>          <C>           <C>         <C>            <C>         <C>                <C>
2nd Quarter 1998        1               6%     $ 3,150,000         43%    $ 5,707,059        25%               --           --
3rd Quarter 1998        1               6%       1,450,000         20%      2,163,887        10%       $  715,275           88%
                      ----          -----      -----------      -----     -----------     -----        ----------        -----
                        2              12%     $ 4,600,000         63%    $ 7,870,946        35%       $  715,275           88%
                      ====          =====      ===========      =====     ===========     =====        ==========        =====

Total, Local
  Partnerships         17             100%     $ 7,348,747        100%    $22,649,942       100%       $  811,695          100%
                      ====          =====      ===========      =====     ===========     =====        ==========        =====

</TABLE>

     The Managing General Partner is continuing to investigate possible
alternatives to reduce the Partnership's debt obligations.  These alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note requirements, paying off certain purchase money notes at a
discounted price, extending the due dates of certain purchase money notes,
refinancing the respective properties' underlying debt or selling the underlying
real estate and using the Partnership's share of the proceeds to pay or buy down
certain purchase money note obligations.  Although the Managing General Partner
has had some success applying these strategies in the past, the Managing General
Partner cannot assure that these strategies will be successful in the future.
If the Managing General Partner is unable to negotiate an extension or
discounted payoff, upon maturity of the purchase money notes, in the event that
the purchase money notes remain unpaid, the noteholders may have the right to
foreclose on the Partnership's interest in the related Local Partnerships.  In
the event of a foreclosure, the excess of the nonrecourse indebtedness over the
carrying amount of the Partnership's investment in the related Local Partnership
would be deemed cancellation of indebtedness income which would be taxable to
Limited Partners at a federal tax rate of up to 39.6%.  Additionally, in the
event of a foreclosure, the Partnership would lose its investment in the Local
Partnership and, likewise, its share of any future cash flow distributed by the
Local Partnership from rental operations, mortgage debt refinancings, or the
sale of the real estate.  Of the 17 Local Partnerships in which the Partnership
is invested as of March 31, 2000, the two Local Partnerships with associated
purchase money notes which have matured and which remain unpaid or unextended as
of May 10, 2000, represented the following percentages of the Partnership's
total distributions received from Local Partnerships and share of income from
Local Partnerships for the immediately preceding two calendar years.





                                      -23-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS - Continued
               -----------------------------------

<TABLE>
<CAPTION>


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


</TABLE>

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

     Interest expense on the Partnership's purchase money notes was $275,065 and
$430,303 for the three months ended March 31, 2000 and 1999, respectively.  The
accrued interest payable on the purchase money notes of $22,649,942 and
$22,374,877 as of March 31, 2000 and December 31, 1999, 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.

     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 three months ended March 31, 2000 and 1999, the receipt of distributions
from Local Partnerships was adequate to support operating cash requirements.
Cash and cash equivalents decreased during the three month period ended March
31, 2000, as the distribution to Additional Limited Partners, made in January
2000 out of the proceeds of the 1999 sale of Wexford Ridge, exceeded cash flow
distributions received from partnerships during the period.

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

     The Partnership's net income for the three month period ended March 31,
2000 decreased from the corresponding period in 1999 primarily due to a decrease
in share of income from partnerships resulting from the refinancing of the first
mortgage loan on Rolling Green at Fall River in 1999, and also due to
extraordinary gain from extinguishment of debt resulting from the discounted
payoffs of the Four Winds West and Troy Manor purchase money notes in 1999.
Offsetting the decrease in net income were an increase in interest income due to
higher cash and cash equivalent balances during 2000 as a result of the receipt
of proceeds from the sale of Wexford Ridge, a decrease in interest expense due
to lower purchase money note balances during 2000 as a result of payments and
extinguishments during 1999, and a decrease in general and administrative
expenses primarily due to lower reimbursed payroll costs.

     For financial reporting purposes, the Partnership, as a limited partner in
the Local Partnerships, does not record losses from the Local Partnerships in

                                      -24-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
               CONDITION AND RESULTS OF OPERATIONS - Continued
               -----------------------------------

excess of its investment to the extent that the Partnership has no further
obligation to advance funds or provide financing to the Local Partnerships.  As
a result, the Partnership's recognized losses included in share of income from
partnerships for the three month period ended March 31, 2000 did not include
losses of $470,980, compared to excluded losses of $423,222 for the three month
period ended March 31, 1999.

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

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

     On April 2, 2000, Peachtree Partners (Peachtree) initiated an unregistered
tender offer to purchase approximately 2,450 of the outstanding units of
additional limited partnership interests (Units) in the Partnership at a price
of $50 per Unit; the offer expires May 19, 2000.  Peachtree is unaffiliated with
the Managing General Partner.  The price offered was determined solely at the
discretion of Peachtree and does not necessarily represent the fair market value
of each Unit.  There is no established market for the purchase and sale of Units
in the Partnership, although various informal secondary market services exist in
addition to the current tender offer by Peachtree.  Due to the limited markets,
however, investors may be unable to sell or otherwise dispose of their Units in
the Partnership.


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 March 31, 2000.

     All other items are not applicable.











                                      -25-
<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



May 10, 2000                 by: /s/ Michael J. Tuszka
-----------------                ---------------------------------------
DATE                             Michael J. Tuszka
                                  Vice President
                                  and Chief Accounting Officer
                                  (Principal Financial Officer
                                  and Principal Accounting Officer)







































                                      -26-
<PAGE>


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


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

27        Financial Data Schedule         Filed herewith electronically






















































                                      -27-