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

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



                                   FORM 10-QSB


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



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


                  For the quarterly period ended June 30, 2003


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



                         Commission file number 0-11973


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


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



        Internal Revenue Service - Employer Identification No. 52-1321492

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


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



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




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

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                       FOR THE QUARTER ENDED JUNE 30, 2003



                                                                           Page
                                                                           ----
Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheets
           - June 30, 2003 and December 31, 2002...........................  1

         Statements of Operations and Accumulated Losses
           - for the three and six months ended June 30, 2003 and 2002.....  2

         Statements of Cash Flows
           - for the six months ended June 30, 2003 and 2002...............  3

         Notes to Financial Statements
           - June 30, 2003 and 2002........................................  4

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

Item 3.  Controls and Procedures........................................... 13


Part II - OTHER INFORMATION

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

Item 6.  Exhibits and Reports on Form 8-K.................................. 14

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

Certifications of Quarterly Report Pursuant to 18 U.S.C. Section 1350...... 16

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

                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                        June 30,      December 31,
                                                                                          2003           2002
                                                                                      ------------    ------------
                                                                                       (Unaudited)
<S>                                                                                   <C>             <C>
Investments in and advances to partnerships .......................................   $  1,422,628    $  1,360,493
Investment in partnership held for transfer .......................................             --           7,577
Cash and cash equivalents .........................................................      4,373,354       3,420,489
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $238,650 and $232,563, respectively ..........        126,541         132,628
Property purchase costs,
  net of accumulated amortization of $250,827 and $244,318, respectively ..........        139,692         146,200
Other assets ......................................................................             71         335,845
                                                                                      ------------    ------------

   Total assets ...................................................................   $  6,062,286    $  5,403,232
                                                                                      ============    ============




                        LIABILITIES AND PARTNERS' CAPITAL



Due on investments in partnerships ................................................   $  1,400,000    $  1,900,000
Accrued interest payable ..........................................................      2,563,262       2,677,938
Accounts payable and accrued expenses .............................................         92,925         113,301
                                                                                      ------------    ------------

   Total liabilities ..............................................................      4,056,187       4,691,239
                                                                                      ------------    ------------

Commitments and contingencies

Partners' capital:

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

                                                                                        50,017,000      50,017,000

  Less:
    Accumulated distributions to partners .........................................    (13,904,726)    (13,904,726)
    Offering costs ................................................................     (5,278,980)     (5,278,980)
    Accumulated losses ............................................................    (28,827,195)    (30,121,301)
                                                                                      ------------    ------------

      Total partners' capital .....................................................      2,006,099         711,993
                                                                                      ------------    ------------

      Total liabilities and partners' capital .....................................   $  6,062,286    $  5,403,232
                                                                                      ============    ============

</TABLE>


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

                                       -1-

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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

                             AND ACCUMULATED LOSSES

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     For the three months ended       For the six months ended
                                                               June 30,                       June 30,
                                                    ----------------------------    ----------------------------
                                                        2003            2002            2003            2002
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>
Share of income from partnerships ...............   $    595,893    $    333,403    $  1,005,613    $    949,184
                                                    ------------    ------------    ------------    ------------

Other revenue and expenses:

  Revenue:
    Interest ....................................          8,696          12,444          16,157          22,529
    Gain from extinguishment of debt ............             --         599,123         670,099         599,123
                                                    ------------    ------------    ------------    ------------

                                                           8,696         611,567         686,256         621,652
                                                    ------------    ------------    ------------    ------------

  Expenses:
    Interest ....................................         31,500          57,935          63,000         115,870
    Management fee ..............................         62,499          62,499         124,998         124,998
    General and administrative ..................         63,554          52,578         140,670         116,254
    Professional fees ...........................         33,250          22,250          56,500          44,500
    Amortization of deferred costs ..............          6,298           6,532          12,595          13,535
                                                    ------------    ------------    ------------    ------------

                                                         197,101         201,794         397,763         415,157
                                                    ------------    ------------    ------------    ------------

      Total other revenue and expenses ..........       (188,405)        409,773         288,493         206,495
                                                    ------------    ------------    ------------    ------------

Net income ......................................        407,488         743,176       1,294,106       1,155,679

Accumulated losses, beginning of period .........    (29,234,683)    (33,638,694)    (30,121,301)    (34,051,197)
                                                    ------------    ------------    ------------    ------------

Accumulated losses, end of period ...............   $(28,827,195)   $(32,895,518)   $(28,827,195)   $(32,895,518)
                                                    ============    ============    ============    ============


Net income allocated
  to General Partners (1.51%) ...................   $      6,153    $     11,222    $     19,541    $     17,451
                                                    ============    ============    ============    ============

Net income allocated
  to Initial and Special Limited Partners (1.49%)   $      6,072    $     11,073    $     19,282    $     17,220
                                                    ============    ============    ============    ============

Net income allocated
  to Additional Limited Partners (97%) ..........   $    395,263    $    720,881    $  1,255,283    $  1,121,008
                                                    ============    ============    ============    ============

Net income per unit of Additional Limited Partner
  Interest, based on 50,000 units outstanding ...   $       7.91    $      14.42    $      25.11    $      22.42
                                                    ============    ============    ============    ============

</TABLE>


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

                                       -2-

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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                           For the six months ended
                                                                                    June 30,
                                                                          --------------------------
                                                                             2003           2002
                                                                          -----------    -----------
<S>                                                                       <C>            <C>
Cash flows from operating activities:
  Net income ..........................................................   $ 1,294,106    $ 1,155,679

  Adjustments to reconcile net income to net cash provided by (used in)
    operating activities:
    Share of income from partnerships .................................    (1,005,613)      (949,184)
    Gain from extinguishment of debt ..................................      (670,099)      (599,123)
    Amortization of deferred costs ....................................        12,595         13,535

    Changes in assets and liabilities:
      Increase in advances to partnerships ............................            --         (1,118)
      Decrease (increase) in other assets .............................       335,774           (353)
      Increase in accrued interest payable ............................        63,000        115,870
      Decrease in accounts payable and accrued expenses ...............       (20,376)        (6,687)
                                                                          -----------    -----------

        Net cash provided by (used in) operating activities ...........         9,387       (271,381)
                                                                          -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..........................       942,435      1,079,335
  Additional proceeds from disposition of investment in partnership ...         1,043             --
                                                                          -----------    -----------

        Net cash provided by investing activities .....................       943,478      1,079,335
                                                                          -----------    -----------

Net increase in cash and cash equivalents .............................       952,865        807,954

Cash and cash equivalents, beginning of period ........................     3,420,489      3,242,912
                                                                          -----------    -----------

Cash and cash equivalents, end of period ..............................   $ 4,373,354    $ 4,050,866
                                                                          ===========    ===========
</TABLE>

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

                                       -3-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2003 and 2002

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of C.R.I.,  Inc. (CRI), the Managing  General  Partner,  the
accompanying unaudited financial statements reflect all adjustments,  consisting
of normal recurring accruals, necessary for a fair presentation of the financial
position of Capital Realty Investors-II Limited Partnership (the Partnership) as
of June 30, 2003, and the results of its operations for the three and six months
ended June 30, 2003 and 2002,  and its cash flows for the six months  ended June
30, 2003 and 2002.  The results of operations  for the interim period ended June
30, 2003, are not  necessarily  indicative of the results to be expected for the
full year.

     The  accompanying  unaudited  financial  statements  have been  prepared in
conformity with accounting principles generally accepted in the United States of
America  and with the  instructions  to Form  10-QSB.  Certain  information  and
accounting  policies and  footnote  disclosures  normally  included in financial
statements prepared in conformity with accounting  principles generally accepted
in the United States of America have been condensed or omitted  pursuant to such
instructions. These condensed financial statements should be read in conjunction
with the financial  statements and notes thereto  included in the  Partnership's
annual report on Form 10-KSB at December 31, 2002.

     In January  2003,  the  Financial  Accounting  Standards  Board issued FASB
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities. FIN
46 clarifies the application of Accounting  Research  Bulletin 51,  Consolidated
Financial Statements, for certain entities that do not have sufficient equity at
risk for the entity to finance its activities  without  additional  subordinated
financial  support from other  parties or in which equity  investors do not have
the  characteristics  of a controlling  financial interest  ("variable  interest
entities").  Variable  interest  entities  within  the  scope  of FIN 46 will be
required  to  be  consolidated  by  their  primary   beneficiary.   The  primary
beneficiary  of a variable  interest  entity is  determined to be the party that
absorbs a majority of the entity's  expected losses,  receives a majority of its
expected  returns,  or both.  FIN 46 applies in the first fiscal year or interim
period beginning after June 15, 2003, to variable  interest entities in which an
enterprise  holds a variable  interest that it acquired before February 1, 2003.
The Managing  General Partner is in the process of determining  what impact,  if
any, the adoption of the  provisions of FIN 46 will have upon the  Partnership's
financial  condition  and  results of  operations  related to the  Partnership's
investments  in  Local  Partnerships,  and  has  complied  with  the  disclosure
requirements of FIN 46 in these financial  statements.  As of June 30, 2003, the
Partnership's  maximum loss exposure  related to its investments in and advances
to partnerships is limited to the remaining balance of $1,422,628.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

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

                               Purchase money note
                               -------------------

     The  Partnership's  remaining  obligation with respect to its investment in
Local  Partnerships,  in the form of a nonrecourse  purchase money note having a
principal  balance of $1,400,000 plus accrued  interest of $2,563,262 as of June
30,  2003,  is payable in full at maturity on  September  1, 2003.  The purchase
money  note,  which  is  nonrecourse  to  the  Partnership,  is  secured  by the
Partnership's interest in the related Local Partnership,  Westgate Tower Limited
Dividend  Housing  Association  (Westgate).  There  is  no  assurance  that  the
underlying  property will have sufficient  appreciation and equity to enable the
Partnership to pay the purchase money note's principal and accrued interest when
due. If the 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  Westgate.  In the event that the  purchase
money note remains  unpaid upon  maturity,  the noteholder may have the right to
foreclose on the Partnership's interest in Westgate.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2003 and 2002

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     The  Partnership's  inability to pay the purchase  money note principal and
accrued interest balance when due, and the resulting  uncertainty  regarding the
Partnership's  continued  ownership  interest in  Westgate,  does not  adversely
impact the Partnership's  financial condition because the purchase money note is
nonrecourse  and  secured  solely by the  Partnership's  interest  in  Westgate.
Therefore,  should the  investment in Westgate not produce  sufficient  value to
satisfy the related purchase money note, the  Partnership's  exposure to loss is
limited  because  the amount of the  nonrecourse  indebtedness  of the  maturing
purchase  money note exceeds the carrying  amount of the investment in Westgate.
Thus, even a complete loss of the  Partnership's  interest in Westgate would not
have a material adverse impact on the financial condition of the Partnership. In
the event of a foreclosure,  the excess of the nonrecourse indebtedness over the
carrying  amount of the  Partnership's  investment  in Westgate  would be deemed
cancellation of indebtedness  income, which would be taxable to Limited Partners
at a  federal  tax  rate  of  up to  35.0%.  Additionally,  in  the  event  of a
foreclosure,  the  Partnership  would  lose  its  investment  in  Westgate  and,
likewise,  its share of any future cash flow distributed by Westgate from rental
operations, mortgage debt refinancings, or the sale of the real estate.

     Interest  expense on the  Partnership's  purchase money notes for the three
and  six  month  periods   ended  June  30,  2003,   was  $31,500  and  $63,000,
respectively, and $57,935 and $115,870 for the three and six month periods ended
June 30, 2002, respectively.  The accrued interest payable on the purchase money
notes of  $2,563,262  and  $2,677,938 as of June 30, 2003 and December 31, 2002,
respectively,  is due on the  respective  maturity  dates of the purchase  money
notes or earlier, in some instances, if (and to the extent of a portion thereof)
the related Local Partnership has distributable net cash flow, as defined in the
relevant Local Partnership agreement.

                                    Princeton
                                    ---------

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

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2003 and 2002

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     On January 1,  2003,  pursuant  to the  option  agreement,  the  noteholder
purchased the Partnership's remaining limited partner interest in Princeton, the
consideration  for which  was the  cancellation  of the  remaining  $677,676  of
purchase money note  principal and accrued  interest.  The purchase  resulted in
gain on extinguishment of debt of $670,099 for financial  statement purposes and
a total gain of $1,854,098  for federal tax purposes in 2003. On April 30, 2002,
pursuant  to the option  agreement,  the  noteholder  purchased  one-half of the
Partnership's  then-  remaining  limited  partner  interest  in  Princeton,  the
consideration  for which was the cancellation of $606,700 of purchase money note
accrued  interest.  The purchase  resulted in gain on  extinguishment of debt of
$599,123 for financial  statement  purposes and a total gain of  $1,783,122  for
federal tax purposes in 2002. On both June 1, 2001 and May 31, 2000, pursuant to
the option agreement, the noteholder purchased 26% of the Partnership's original
limited  partner  interest in  Princeton,  the  consideration  for which was the
cancellation of a like percentage of the then-  outstanding  purchase money note
accrued interest of $392,333 and $493,027, respectively,  resulting in gain from
extinguishment of debt of $384,123 and $484,862 for financial statement purposes
in 2001 and 2000, respectively, and in a total gain of $1,583,512 and $1,921,910
for federal tax purposes in 2001 and 2000, respectively.

     Due to the subsequent  transfer of the Partnership's  remaining interest in
Princeton, the Partnership's basis in the Local Partnership,  along with the net
unamortized  acquisition fees and property purchase costs,  which totaled $7,577
as of December 31, 2002, was  reclassified to investment in partnership held for
transfer in the accompanying balance sheet at that date.

                                    Westgate
                                    --------

     The purchase money note, in the principal amount of $1,400,000,  related to
Westgate  matures on September 1, 2003 (as  previously  extended).  The Managing
General Partner will begin  discussions with the purchase money noteholder prior
to the  maturity of the Westgate  purchase  money note to  investigate  possible
alternatives  concerning this debt  obligation.  There can be no assurance about
what  course of action  will be chosen,  or whether  it will be  successful,  or
whether the Partnership will retain its interest in Westgate.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2003 and 2002

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

b.   Summarized financial information
     --------------------------------

     Combined  statements of operations for the 12 and 14 Local  Partnerships in
which the  Partnership  is invested as of June 30, 2003 and 2002,  respectively,
follow. The combined statements have been compiled from information  supplied by
the management  agents of the projects and are unaudited.  The  information  for
each of the periods is presented  separately for those Local  Partnerships which
have investment  basis (equity  method),  and for those Local  Partnerships  for
which  the  Partnership's  carrying  value is zero  (equity  method  suspended).
Appended   after  the  combined   statements  is   information   concerning  the
Partnership's  share of income from partnerships  related to cash  distributions
recorded as income, and related to the Partnership's  share of income from Local
Partnerships.

                        COMBINED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 For the three months ended
                                                                          June 30,
                                                 -------------------------------------------------------------
                                                            2003                              2002
                                                 --------------------------        ---------------------------
                                                   Equity                            Equity
                                                   Method        Suspended           Method         Suspended
                                                 ----------      ----------        ----------       ----------
         <S>                                     <C>             <C>               <C>              <C>
         Revenue:
           Rental                                $1,479,329      $2,477,768        $1,415,668       $3,305,346
           Other                                     34,961         102,654            41,243          244,458
                                                 ----------      ----------        ----------       ----------

             Total revenue                        1,514,290       2,580,422         1,456,911        3,549,804
                                                 ----------      ----------        ----------       ----------

         Expenses:
           Operating                                765,142       1,510,770           935,465        2,065,765
           Interest                                 216,195         942,107           239,444        1,028,295
           Depreciation and amortization            200,139         439,379           199,819          619,198
                                                 ----------      ----------        ----------       ----------

             Total expenses                       1,181,476       2,892,256         1,374,728        3,713,258
                                                 ----------      ----------        ----------       ----------


         Net income (loss)                       $  332,814      $ (311,834)       $   82,183       $ (163,454)
                                                 ==========      ==========        ==========       ==========

         Cash distributions                      $  680,502      $   40,490        $  691,169       $   41,722
                                                 ==========      ==========        ==========       ==========

         Cash distributions recorded
           as reduction in investment            $  458,190      $       --        $  479,718       $       --
                                                 ==========      ==========        ==========       ==========

         Cash distributions recorded
           as income                             $  222,312      $   40,490        $  211,451       $   41,722

         Partnership's share of Local
           Partnership net income                   332,255              --            80,230               --

         Miscellaneous                                   --             836                --              --
                                                 --------------------------        --------------------------

         Share of income from partnerships                $595,89                             $333,403
                                                          =======                             ========

</TABLE>

                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2003 and 2002

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>

                                                                 For the six months ended
                                                                          June 30,
                                                 ------------------------------------------------------------
                                                            2003                              2002
                                                 --------------------------        --------------------------
                                                   Equity                            Equity
                                                   Method        Suspended           Method         Suspended
                                                 ----------      ----------        ----------       ----------
         <S>                                     <C>             <C>               <C>              <C>
         Revenue:
           Rental                                $2,903,809      $4,955,539        $2,927,189       $6,610,691
           Other                                     67,539         205,308            79,245          488,916
                                                 ----------      ----------        ----------       ----------

             Total revenue                        2,971,348       5,160,847         3,006,434        7,099,607
                                                 ----------      ----------        ----------       ----------

         Expenses:
           Operating                              1,616,059       3,021,540         1,773,894        4,131,528
           Interest                                 432,391       1,884,215           478,891        2,056,595
           Depreciation and amortization            400,278         878,758           399,639        1,238,393
                                                 ----------      ----------        ----------       ----------

             Total expenses                       2,448,728       5,784,513         2,652,424        7,426,516
                                                 ----------      ----------        ----------       ----------


         Net income (loss)                       $  522,620      $ (623,666)       $  354,010       $ (326,909)
                                                 ==========      ==========        ==========       ==========

         Cash distributions                      $  680,502      $  261,933        $  691,169       $  388,166
                                                 ==========      ==========        ==========       ==========

         Cash distributions recorded
           as reduction in investment            $  458,190      $       --        $  479,718       $       --
                                                 ==========      ==========        ==========       ==========

         Cash distributions recorded
           as income                             $  222,312      $  261,933        $  211,451       $  388,166

         Partnership's share of Local
           Partnership net income                   520,325              --           350,684              --

         Miscellaneous                                   --           1,043                --          (1,117)
                                                 --------------------------        --------------------------

         Share of income from partnerships               $1,005,613                         $949,184
                                                         ==========                         ========
</TABLE>


     All of the cash  distributions  recorded as income are included in share of
income from  partnerships  on the  statements of operations  for the  respective
periods,  and are recorded as cash receipts on the respective balance sheets. As
of June 30, 2003 and 2002, the Partnership's  share of cumulative losses to date
for eight and ten of the 12 and 14 Local Partnerships exceeded the amount of the
Partnership's  investments  in and  advances  to  those  Local  Partnerships  by
$19,521,290  and  $21,277,888,  respectively.  As the Partnership has no further
obligation  to advance funds or provide  financing to these Local  Partnerships,
the  excess  losses  have  not  been  reflected  in the  accompanying  financial
statements.


                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                             June 30, 2003 and 2002

                                   (Unaudited)


3.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $60,939 and
$119,153 for the three and six month periods ended June 30, 2003,  respectively,
and $34,571 and $94,537 for the three and six month periods ended June 30, 2002,
respectively,  to the  Managing  General  Partner  as  direct  reimbursement  of
expenses  incurred on behalf of the  Partnership.  Such expenses are included in
the  accompanying   statements  of  operations  as  general  and  administrative
expenses.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The
Partnership  paid the Managing  General  Partner a Management Fee of $62,499 for
each of the three month periods  ended June 30, 2003 and 2002,  and $124,998 for
each of the six month periods ended June 30, 2003 and 2002.

                                      # # #

                                       -9-

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


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

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

     The  Partnership has disclosed its selection and application of significant
accounting  policies in Note 1 of the notes to financial  statements included in
the  Partnership's  annual  report on Form  10-KSB at  December  31,  2002.  The
Partnership accounts for its investments in partnerships (Local Partnerships) by
the equity  method  because the  Partnership  is a limited  partner in the Local
Partnerships.  As such the  Partnership  has no control over the  selection  and
application  of  accounting  policies,  or the use of  estimates,  by the  Local
Partnerships.

                                     General
                                     -------

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

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

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

                                      -10-

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


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

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

     As of June 30, 2003, the carrying amount of the  Partnership's  investments
in and advances to Local  Partnerships with Section 8 HAP contracts  expiring in
the next 12 months was $0.

     The Managing  General  Partner  continues to seek  strategies  to deal with
affordable housing policy. While the Managing General Partner cannot predict the
outcome for any particular  property at this time, the Managing  General Partner
will continue to work with the Local  Partnerships  to develop  strategies  that
maximize the benefits to investors.

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

     The Partnership's liquidity, with unrestricted cash resources of $4,373,354
as of June 30, 2003, along with anticipated  future cash  distributions from the
Local  Partnerships,  is  expected  to be  adequate  to  meet  its  current  and
anticipated  operating cash needs. As of August 5, 2003,  there were no material
commitments for capital expenditures.

     The  Partnership's  remaining  obligation with respect to its investment in
Local  Partnerships,  in the form of a nonrecourse  purchase money note having a
principal  balance of $1,400,000 plus accrued  interest of $2,563,262 as of June
30,  2003,  is payable in full at maturity on  September  1, 2003.  The purchase
money  note,  which  is  nonrecourse  to  the  Partnership,  is  secured  by the
Partnership's interest in the related Local Partnership,  Westgate Tower Limited
Dividend  Housing  Association  (Westgate).  There  is  no  assurance  that  the
underlying  property will have sufficient  appreciation and equity to enable the
Partnership to pay the purchase money note's principal and accrued interest when
due. If the 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  Westgate.  In the event that the  purchase
money note remains  unpaid upon  maturity,  the noteholder may have the right to
foreclose on the Partnership's interest in Westgate.

                                      -11-

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


     The  Partnership's  inability to pay the purchase  money note principal and
accrued interest balance when due, and the resulting  uncertainty  regarding the
Partnership's  continued  ownership  interest in  Westgate,  does not  adversely
impact the Partnership's  financial condition because the purchase money note is
nonrecourse  and  secured  solely by the  Partnership's  interest  in  Westgate.
Therefore,  should the  investment in Westgate not produce  sufficient  value to
satisfy the related purchase money note, the  Partnership's  exposure to loss is
limited  because  the amount of the  nonrecourse  indebtedness  of the  maturing
purchase  money note exceeds the carrying  amount of the investment in Westgate.
Thus, even a complete loss of the  Partnership's  interest in Westgate would not
have a material adverse impact on the financial condition of the Partnership. In
the event of a foreclosure,  the excess of the nonrecourse indebtedness over the
carrying  amount of the  Partnership's  investment  in Westgate  would be deemed
cancellation of indebtedness  income, which would be taxable to Limited Partners
at a  federal  tax  rate  of  up to  35.0%.  Additionally,  in  the  event  of a
foreclosure,  the  Partnership  would  lose  its  investment  in  Westgate  and,
likewise,  its share of any future cash flow distributed by Westgate from rental
operations,  mortgage  debt  refinancings,  or the sale of the real estate.  The
Partnership  received no cash  distributions from Westgate during 2002 and 2001;
thus, in the event of a foreclosure,  there would be no material  adverse impact
on the cash liquidity of the Partnership.

     The sale of the  Partnership's  interest  in  Princeton  Community  Village
Associates  (Princeton) over a four year period did not affect the Partnership's
cash liquidity,  since the only  consideration  received was the cancellation of
portions of purchase money note principal and accrued interest.  The Partnership
did not  receive any cash  distributions  from  Princeton  during this four year
period.

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the six month  period  ended June 30, 2003,  operating  activities  provided
positive cash flow.  Cash and cash  equivalents  increased  during the six month
period ended June 30, 2003, primarily as a result of distributions received from
Local Partnerships.  Approximately 28% of the distributions received for the six
month  period ended June 30, 2003,  were from Local  Partnerships  for which the
Partnership's carrying value is zero (equity method suspended).  The Partnership
expects to receive a lower amount of distributions from these Local Partnerships
in future years as more Section 8 HAP contracts approach expiration,  should the
related  properties  enter  the  Mark-to-Market   program,  with  the  resulting
reduction in rental revenue.

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

     The  Partnership's  net income for the three  month  period  ended June 30,
2003,  decreased $336,000 from the corresponding period in 2002 primarily due to
gain from  extinguishment of debt recognized during the 2002 period, an increase
in  professional  fees related to the sale of Rock Glen,  an increase in general
and  administrative  expenses related to higher reimbursed  payroll costs, and a
nominal decrease in interest revenue.  Partially  offsetting the decrease in net
income was an increase in share of income from  partnerships,  and a decrease in
interest  expense due to lower  purchase  money note  balances.  The increase in
share of income from  partnerships  was the result of rental  increases at three
properties and improved  occupancy at two properties,  and a decrease in utility
and  maintenance  costs  at  one  property  and  a  decrease  in  insurance  and
maintenance  costs at another  property.  The Partnership is not able to predict
whether the improvement in property operating results will continue.


                                      -12-

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


     The  Partnership's net income for the six month period ended June 30, 2003,
increased  $138,000 from the  corresponding  period in 2002,  primarily due to a
higher  gain  from  extinguishment  of  debt  related  to  the  transfer  of the
Partnership's remaining interest in Princeton to the noteholder. Contributing to
the increase in the  Partnership's net income was an increase in share of income
from  partnerships,  and a decrease  in  interest  expense as  discussed  above.
Partially  offsetting  the increase in net income was an increase in general and
administrative  expenses  related  to  higher  reimbursed  payroll  costs and an
accrual for state business taxes, an increase in professional  fees as discussed
above,  and a decrease in interest  revenue due to declining rates. The increase
in share of income  from  partnerships  was  primarily  the result of  decreased
property  operating  costs as discussed  above.  The  Partnership is not able to
predict  whether the  improvement in property  operating  results will continue.
Partially  offsetting  the increase in share of income from  partnerships  was a
decrease in cash  distributions  recorded as income (equity  method  suspended).
This  decrease is not  expected to continue as it was  primarily  related to the
timing of the receipt of the annual cash distribution from one property.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnerships. As a
result,  the  Partnership's  share of income from partnerships for the three and
six month  periods  ended June 30, 2003 did not include  losses of $314,831  and
$629,660, respectively, compared to excluded losses of $272,922 and $548,203 for
the three and six month periods ended June 30, 2002, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the three month  period ended June 30, 2003.  The increase in share
of income from partnerships was the result of an increase in cash  distributions
received from partnerships with zero basis.


Item 3. Controls and Procedures
        -----------------------

     In July  2003,  representatives  of the  Managing  General  Partner  of the
Partnership  carried out an  evaluation of the  effectiveness  of the design and
operation of the Partnership's  disclosure controls and procedures,  pursuant to
Exchange Act Rules 13a-14 and 15d-14.  Based on that  evaluation,  the Principal
Executive   Officer  and  Principal   Financial   Officer   concluded  that  the
Partnership's  disclosure controls and procedures are effective to alert them in
a timely manner to any material  information  relating to the  Partnership  that
must be included in the Partnership's  periodic SEC filings. In addition,  there
have been no significant  changes in the  Partnership's  internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of the most recent evaluation.


Part II. OTHER INFORMATION
Item 5. Other Information
        -----------------

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

                           Unregistered Tender Offers
                           --------------------------

     On  May  23,  2003,  Equity  Resource  Fund  XXII  (Equity)   initiated  an
unregistered  tender offer to purchase up to 1,200 of the  outstanding  Units in
the Partnership at a price of $120 per Unit; the offer expired June 23, 2003. On
April 11, 2003, Equity initiated an unregistered  tender offer to purchase up to
1,200 of the  outstanding  Units in the Partnership at a price of $120 per Unit;
the offer expired May 12, 2003. Equity is not affiliated with the Partnership or
the Managing General Partner.  The prices offered were determined  solely at the
discretion of Equity and do not  necessarily  represent the fair market value of
each Unit.

                                      -13-

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

     On March 14, 2003, Peachtree Partners (Peachtree) initiated an unregistered
tender offer to purchase an unspecified  number of the outstanding  Units in the
Partnership  at a price of $100 per Unit;  the  offer  expired  April 18,  2003.
Peachtree  is not  affiliated  with  the  Partnership  or the  Managing  General
Partner.  The price offered was determined solely at the discretion of Peachtree
and does not necessarily represent the fair market value of each Unit.

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


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

     a.   Exhibits

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

              99          Certification of Periodic Financial Report
                          Pursuant to 18 U.S.C. Section 1350

     b.   No  reports  on Form 8-K were  filed  with the  Commission  during the
          quarter ended June 30, 2003.

All other Items are not applicable.


                                      -14-

<PAGE>
                                    SIGNATURE


     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


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

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




August 5, 2003                         by: /s/ Michael J. Tuszka
--------------                             -------------------------------------
DATE                                       Michael J. Tuszka
                                             Vice President
                                             and Chief Accounting Officer
                                             (Principal Financial Officer
                                             and Principal Accounting Officer)

                                      -15-

<PAGE>

                        CERTIFICATION OF QUARTERLY REPORT
                       Pursuant to 18 U.S.C. Section 1350,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


         I, Michael J. Tuszka, certify that:

         1.       I have reviewed this quarterly report on Form 10-QSB of
                  CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP;

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;

         4.       The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.       The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of the
                  registrant's board of directors (or persons performing the
                  equivalent functions):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and


                                      -16-

<PAGE>
         6.       The registrant's other certifying officer and I have indicated
                  in this quarterly report whether there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.


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

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



August 5, 2003                           by:  /s/ Michael J. Tuszka
--------------                                ----------------------------------
DATE                                          Michael J. Tuszka,
                                                Vice President
                                                and Chief Accounting Officer
                                                (Principal Financial Officer)


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

                                      -17-

<PAGE>
                        CERTIFICATION OF QUARTERLY REPORT
                       Pursuant to 18 U.S.C. Section 1350,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


         I, William B. Dockser, certify that:

         1.       I have reviewed this quarterly report on Form 10-QSB of
                  CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP;

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;

         4.       The registrant's other certifying officer and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which the periodic reports are being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5.       The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of the
                  registrant's board of directors (or persons performing the
                  equivalent functions):


         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and


                                      -18-

<PAGE>
         6.       The registrant's other certifying officer and I have indicated
                  in this quarterly report whether there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.


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

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



August 5, 2003                           by:  /s/ William B. Dockser
--------------                                ----------------------------------
DATE                                          William B. Dockser,
                                                Director, Chairman of the Board,
                                                and Treasurer
                                                (Principal Executive Officer)


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



                                      -19-