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

                     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 September 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 | |




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



                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2003



                                                                          Page
                                                                          ----

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

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

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

         Notes to Financial Statements
           - September 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 3.  Defaults Upon Senior Securities...................................  14

Item 5.  Other Information.................................................  14

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

Signature..................................................................  16

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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                      September 30,   December 31,
                                                                                          2003           2002
                                                                                      ------------    ------------
                                                                                       (Unaudited)
<S>                                                                                   <C>             <C>
Investments in and advance to partnerships ........................................   $    899,114    $  1,360,493
Investment in partnerships held for transfer ......................................        506,371           7,577
Cash and cash equivalents .........................................................      4,508,484       3,420,489
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $215,200 and $232,563, respectively ..........        110,258         132,628
Property purchase costs,
  net of accumulated amortization of $242,449 and $244,318, respectively ..........        130,213         146,200
Other assets ......................................................................             67         335,845
                                                                                      ------------    ------------

   Total assets ...................................................................   $  6,154,507    $  5,403,232
                                                                                      ============    ============




                        LIABILITIES AND PARTNERS' CAPITAL



Due on investments in partnerships ................................................   $  1,400,000    $  1,900,000
Accrued interest payable ..........................................................      2,594,762       2,677,938
Accounts payable and accrued expenses .............................................        116,025         113,301
                                                                                      ------------    ------------

   Total liabilities ..............................................................      4,110,787       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 ............................................................    (28,789,574)    (30,121,301)
                                                                                      ------------    ------------

      Total partners' capital .....................................................      2,043,720         711,993
                                                                                      ------------    ------------

      Total liabilities and partners' capital .....................................   $  6,154,507    $  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 nine months ended
                                                            September 30,                   September 30,
                                                    ----------------------------    ----------------------------
                                                        2003            2002            2003            2002
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>
Share of income from partnerships ...............   $    221,192    $    187,753    $  1,226,805    $  1,136,937
                                                    ------------    ------------    ------------    ------------

Other revenue and expenses:

  Revenue:
    Interest ....................................          6,336          13,685          22,493          36,213
    Gain from extinguishment of debt ............             --              --         670,099         599,123
                                                    ------------    ------------    ------------    ------------

                                                           6,336          13,685         692,592         635,336
                                                    ------------    ------------    ------------    ------------

  Expenses:
    Interest ....................................         31,500          57,935          94,500         173,805
    Management fee ..............................         62,499          62,499         187,497         187,497
    General and administrative ..................         66,520          70,642         207,190         186,895
    Professional fees ...........................         23,250          22,250          79,750          66,750
    Amortization of deferred costs ..............          6,138           6,532          18,733          20,067
                                                    ------------    ------------    ------------    ------------

                                                         189,907         219,858         587,670         635,014
                                                    ------------    ------------    ------------    ------------

      Total other revenue and expenses ..........       (183,571)       (206,173)        104,922             322
                                                    ------------    ------------    ------------    ------------

Income (loss) before gain on disposition of
  investment in partnership .....................         37,621         (18,420)      1,331,727       1,137,259

Gain on disposition of investment in
  partnership ...................................             --       2,502,001              --       2,502,001
                                                    ------------    ------------    ------------    ------------

Net income ......................................         37,621       2,483,581       1,331,727       3,639,260

Accumulated losses, beginning of period .........    (28,827,195)    (32,895,518)    (30,121,301)    (34,051,197)
                                                    ------------    ------------    ------------    ------------

Accumulated losses, end of period ...............   $(28,789,574)   $(30,411,937)   $(28,789,574)   $(30,411,937)
                                                    ============    ============    ============    ============


Net income allocated
  to General Partners (1.51%) ...................   $        568    $     37,502    $     20,109    $     54,953
                                                    ============    ============    ============    ============

Net income allocated
  to Initial and Special Limited Partners (1.49%)   $        561    $     37,005    $     19,843    $     54,225
                                                    ============    ============    ============    ============

Net income allocated
  to Additional Limited Partners (97%) ..........   $     36,492    $  2,409,074    $  1,291,775    $  3,530,082
                                                    ============    ============    ============    ============

Net income per unit of Additional Limited Partner
  Interest, based on 49,910 units outstanding ...   $       0.73    $      48.27    $      25.88    $      70.73
                                                    ============    ============    ============    ============
</TABLE>

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

                                       -2-

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


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   For the nine months ended
                                                                                          September 30,
                                                                                  --------------------------
                                                                                     2003            2002
                                                                                  -----------    -----------
<S>                                                                               <C>            <C>
Cash flows from operating activities:
  Net income ..................................................................   $ 1,331,727    $ 3,639,260

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of income from partnerships .........................................    (1,226,805)    (1,136,937)
    Gain from extinguishment of debt ..........................................      (670,099)      (599,123)
    Amortization of deferred costs ............................................        18,733         20,067
    Gain on disposition of investment in partnership ..........................            --     (2,502,001)

    Changes in assets and liabilities:
      Increase in advances to partnerships ....................................            --         (1,118)
      Decrease (increase) in other assets .....................................       335,778           (146)
      Increase in accrued interest payable ....................................        94,500        173,805
      Increase in accounts payable and accrued expenses .......................         2,724         11,038
                                                                                  -----------    -----------

        Net cash used in operating activities .................................      (113,442)      (395,155)
                                                                                  -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..................................     1,200,394      1,149,175
  Proceeds from disposition of investment in partnership, net .................            --      2,533,725
  Additional proceeds from disposition of investment in partnership ...........         1,043             --
                                                                                  -----------    -----------

        Net cash provided by investing activities .............................     1,201,437      3,682,900
                                                                                  -----------    -----------

Cash flows from financing activities:
  Distribution to General Partners and Initial and Special Limited Partners ...            --       (199,485)
                                                                                  -----------    -----------

Net increase in cash and cash equivalents .....................................     1,087,995      3,088,260

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

Cash and cash equivalents, end of period ......................................   $ 4,508,484    $ 6,331,172
                                                                                  ===========    ===========

</TABLE>


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

                                       -3-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 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 September 30, 2003,  and the results of its operations for the three and nine
months ended September 30, 2003 and 2002, and its cash flows for the nine months
ended  September 30, 2003 and 2002.  The results of  operations  for the interim
periods ended September 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.  Application  of the  provisions of FIN 46 has been
deferred  until  the end of the first  interim  or annual  period  ending  after
December 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 limited
partnership  (Local   Partnerships),   and  has  complied  with  the  disclosure
requirements of FIN 46 in these financial statements.  As of September 30, 2003,
the  Partnership's  maximum  loss  exposure  related to its  investments  in and
advances to partnerships is limited to the remaining balance of $1,405,485.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

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

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

     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  $2,594,762  as of
September 30, 2003, matured on September 1, 2003, and was not paid. 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). See below for further discussion of the
Partnership's default on this purchase money note.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 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, even though the Partnership's investment in Westgate has not produced
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  or other  transfer  of the
Partnership's  interest,  the excess of the  nonrecourse  indebtedness  over the
carrying  amount of the  Partnership's  investment  in  Westgate  will result in
taxable  gain.  This gain will be taxable to Limited  Partners  at a federal tax
rate of up to 25%,  as it will  reflect  recapture  of  depreciation  deductions
claimed in prior years.  Additionally,  in the event of a  foreclosure  or other
transfer  of  the  Partnership's   interest,  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 nine month  periods  ended  September  30,  2003,  was $31,500 and  $94,500,
respectively,  and $57,935  and  $173,805  for the three and nine month  periods
ended  September 30, 2002,  respectively.  The accrued  interest  payable on the
purchase  money notes of $2,594,762 and $2,677,938 as of September 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

                           September 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 partnerships held for
transfer in the accompanying balance sheet at that date.

                                    Westgate
                                    --------

     The Partnership defaulted on its purchase money note related to Westgate on
September 1, 2003,  when the note (as  extended)  matured and was not paid.  The
default  amount  included  principal  and  accrued  interest of  $1,400,000  and
$2,584,492, respectively. As of November 4, 2003, principal and accrued interest
of $1,400,000 and  $2,606,585,  respectively,  were due. In September  2003, the
Managing  General  Partner  offered  to tender  the  Partnership's  interest  in
Westgate  to  the  purchase  money  noteholders,  in  full  satisfaction  of the
principal and accrued  interest  balances due on the purchase  money note. As of
November 4, 2003, the trustee for the  noteholders  acknowledged  receipt of the
Managing  General  Partner's  offer,  but  indicated  that it would need several
months to  formulate  a  recommendation  to,  and obtain a  response  from,  the
beneficial  noteholders.  There is no assurance that the noteholders will accept
the  offer,  or what  other  course of action the  noteholders  might  choose to
pursue.

     Due to the possible transfer of the  Partnership's  interest in Westgate to
the noteholders,  the Partnership's  basis in the Local Partnership,  along with
the net unamortized  acquisition fees and property purchase costs, which totaled
$506,371 as of September  30,  2003,  has been  reclassified  to  investment  in
partnerships held for transfer in the accompanying balance sheet at that date.

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

     Combined  statements of operations for the 12 and 13 Local  Partnerships in
which  the  Partnership  was  invested  as  of  September  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.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2003 and 2002

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued


                        COMBINED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                 For the three months ended
                                                                        September 30,
                                                 -----------------------------------------------------------
                                                            2003                             2002
                                                 -------------------------        --------------------------
                                                   Equity                           Equity
                                                   Method        Suspended          Method        Suspended
                                                 ----------      ----------       ----------      ----------
         <S>                                     <C>             <C>              <C>             <C>
         Number of Local Partnerships                3               9                4               9
                                                     =               =                =               =

         Revenue:
           Rental                                $1,083,911      $2,850,338       $  937,773      $3,820,295
           Other                                     59,583         121,932           34,549         256,603
                                                 ----------      ----------       ----------      ----------

             Total revenue                        1,143,494       2,972,270          972,322       4,076,898
                                                 ----------      ----------       ----------      ----------

         Expenses:
           Operating                                579,254       1,686,930          543,540       2,331,861
           Interest                                 133,309       1,024,994          101,116       1,166,628
           Depreciation and amortization            151,667         487,845          131,280         687,734
                                                 ----------      ----------       ----------      ----------

             Total expenses                         864,230       3,199,769          775,936       4,186,223
                                                 ----------      ----------       ----------      ----------

         Net income (loss)                       $  279,264      $ (227,499)      $  196,386      $ (109,325)
                                                 ==========      ==========       ==========      ==========

         Cash distributions                      $  199,980      $   57,979       $       --      $   69,839
                                                 ==========      ==========       ==========      ==========

         Cash distributions recorded
           as reduction of investments
           in partnerships                       $  199,980      $       --       $       --      $   53,582
                                                 ==========      ==========       ==========      ==========

         Cash distributions recorded
           as income                             $       --      $   57,979       $       --      $   16,257

         Partnership's additional share of
           Local Partnership net income             163,213              --          117,914          53,582 (1)

         Miscellaneous                                   --              --               --              --
                                                 --------------------------        -------------------------

         Share of income from partnerships                $221,19                           $187,753
                                                          =======                           ========
</TABLE>


     (1)  Represents  Partnership's share of income from a Local Partnership for
          which the  Partnership's  carrying  value is zero,  but which does not
          have unallowable losses.


                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2003 and 2002

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>
                                                                 For the nine months ended
                                                                        September 30,
                                                 ------------------------------------------------------------
                                                            2003                              2002
                                                 --------------------------        --------------------------
                                                   Equity                            Equity
                                                   Method        Suspended           Method        Suspended
                                                 ----------      ----------        ----------     -----------
         <S>                                     <C>             <C>               <C>            <C>
         Number of Local Partnerships                3               9                 4              9
                                                     =               =                 =              =

         Revenue:
           Rental                                $3,246,764      $8,546,833        $2,835,059     $11,460,889
           Other                                    111,287         343,075            89,499         769,814
                                                 ----------      ----------        ----------     -----------

             Total revenue                        3,358,051       8,889,908         2,924,558      12,230,703
                                                 ----------      ----------        ----------     -----------

         Expenses:
           Operating                              1,870,421       5,033,362         1,785,237       6,995,586
           Interest                                 399,926       3,074,983           303,348       3,499,882
           Depreciation and amortization            455,005       1,463,543           393,840       2,063,206
                                                 ----------      ----------        ----------     -----------

             Total expenses                       2,725,352       9,571,888         2,482,425      12,558,674
                                                 ----------      ----------        ----------     -----------


         Net income (loss)                       $  632,699      $ (681,980)       $  442,133     $  (327,971)
                                                 ==========      ==========        ==========     ===========

         Cash distributions                      $  600,743      $  599,651        $  449,028     $   700,147
                                                 ==========      ==========        ==========     ===========

         Cash distributions recorded
           as reduction of investments
           in partnerships                       $  600,743      $  273,296        $  449,028     $   160,751
                                                 ==========      ==========        ==========     ===========

         Cash distributions recorded
           as income                             $       --      $  326,355        $       --     $   539,396

         Partnership's share of Local
           Partnership net income                   630,390         269,017 (1)       437,908         160,751 (1)

         Miscellaneous                                   --           1,043                --          (1,118)
                                                 --------------------------         -------------------------

         Share of income from partnerships               $1,226,805                         $1,136,937
                                                         ==========                         ==========
</TABLE>


     (1)  Represents  Partnership's share of income from a Local Partnership for
          which the  Partnership's  carrying  value is zero,  but which does not
          have unallowable losses.


     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 September 30, 2003 and 2002, the Partnership's  share of cumulative losses to
date for eight of the 12 and 13 Local Partnerships,  respectively,  exceeded the
amount  of  the  Partnership's  investments  in  and  advances  to  those  Local
Partnerships by $19,844,126 and  $21,229,715,  respectively.  As the Partnership
has no further  obligation to advance funds or provide  financing to these Local
Partnerships,  the excess  losses have not been  reflected  in the  accompanying
financial statements.


                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 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 $54,397 and
$173,550  for the  three  and nine  month  periods  ended  September  30,  2003,
respectively,  and $44,030  and  $138,568  for the three and nine month  periods
ended  September  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  September 30, 2003 and 2002, and $187,497
for each of the nine month periods ended September 30, 2003 and 2002.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than two percent of the sales price of an investment in a Local Partnership
or the property it owns,  payable under certain  conditions  upon the sale of an
investment in a Local  Partnership  or the property it owns.  The payment of the
fee is subject to certain  restrictions,  including the achievement of a certain
level of sales  proceeds and making  certain  minimum  distributions  to limited
partners. In September 2002, the Managing General Partner was paid a disposition
fee of $128,000  relating to the sale of Rock Glen, which was netted against the
related gain on disposition of investment in partnership.

                                      # # #

                                       -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.

     Mercy  Terrace  Associates  (Mercy  Terrace)  has a Section 8 HAP  contract
covering 100% of its apartment  units which expires in November  2003. The Local
Managing  General  Partner will enter Mercy  Terrace into the  Mark-up-to-Market
program at that time.  With the renewal of the Section 8 HAP contract  under the
Mark-up-to-Market   program   the   limitation   on  the  amount  of   allowable
distributions will be lifted.  However,  due to a significant ground lease and a
purchase money note on the property,  it is unlikely that the Local  Partnership
(and therefore the  Partnership)  will receive  increased cash flow from surplus
cash distributions.  Posada Associates Limited Partnership (Posada Vallarta) has
a Section 8 HAP contract  covering 21% of its  apartment  units which expires in
February 2004.  Posada Vallarta  anticipates a one-year renewal of its Section 8
HAP contract at expiration. As of September 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 $4,508,484
as of September 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 November 4, 2003, there were no material
commitments for capital expenditures.  The Managing General Partner has approved
distributions  totaling  $1,389,570  to be paid in  November  2003  (see Item 5,
below, for additional information concerning these distributions).

     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  $2,594,762  as of
September  30, 2003,  was payable in full at maturity on September 1, 2003.  The
purchase money note, which is nonrecourse to the Partnership,  is secured solely
by the Partnership's  interest in the related Local Partnership,  Westgate Tower
Limited Dividend Housing Association (Westgate). The Partnership's investment in
Westgate has not produced sufficient value to satisfy the purchase money note,
and the Managing General Partner has offered to tender the Partnership's
interest in Westgate to the purchase money noteholders. See the notes to
financial statements for additional information concerning this purchase money
note.

                                      -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,  even though the  investment in Westgate has not produced  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   or  other  transfer  of  the
Partnership's  interest,  the excess of the  nonrecourse  indebtedness  over the
carrying  amount of the  Partnership's  investment  in  Westgate  will result in
taxable  gain.  This gain will be taxable to Limited  Partners  at a federal tax
rate of up to 25%,  as it will  reflect  recapture  of  depreciation  deductions
claimed in prior years.  Additionally,  in the event of a  foreclosure  or other
transfer  of  the  Partnership's   interest,  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  through  November  4, 2003;  thus,  in the event of a
foreclosure or other transfer of the Partnership's  interest,  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 nine month period ended September 30, 2003, the receipt of distributions
from Local  Partnerships  was adequate to support  operating cash  requirements.
Cash and cash  equivalents  increased  $1,087,995  during the nine month  period
ended September 30, 2003,  primarily as a result of distributions  received from
Local Partnerships exceeding net cash used in operating activities. For the nine
months ended  September 30, 2003,  $599,651 of the  distributions  received 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.

     After the  distributions  to be made in November 2003, the Managing General
Partner intends to retain all of the Partnership's  remaining undistributed cash
for operating cash reserves.

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

     The Partnership's net income for the three month period ended September 30,
2003,  decreased  $2,445,960 from the corresponding period in 2002 primarily due
to gain on disposition of investment in  partnership  during the 2002 period,  a
decrease  in  interest  revenue due to  declining  interest  rates and a nominal
increase in professional fees.  Partially  offsetting the decrease in net income
was an  increase in share of income  from  partnerships,  a decrease in interest
expense due to lower  purchase  money note  balances,  and nominal  decreases in
general and  administrative  expenses and  amortization of deferred  costs.  The
increase in share of income from  partnerships  was the result of an increase in
rental  revenue  at the  property  related to one Local  Partnership,  partially
offset by an increase in  operating  expenses  related to  maintenance  costs at
another property,  and an increase in cash distributions recorded as income from
Local  Partnerships for which the  Partnership's  carrying value is zero (equity
method suspended).

                                      -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 nine month period ended September 30,
2003,  decreased $2,307,533 from the corresponding period in 2002, primarily due
to gain on disposition of investment in  partnership  during the 2002 period,  a
decrease in interest  revenue,  as discussed  above,  an increase in general and
administrative  expenses  related to higher  reimbursed  payroll  costs,  and an
increase in professional fees.  Partially  offsetting the decrease in net income
were an increase in share of income  from  partnerships,  a decrease in interest
expense, as discussed above, an increase in gain on extinguishment of debt and a
nominal  decrease in amortization  of deferred  costs.  The increase in share of
income from  partnerships was the net result of: (i) increases in rental revenue
at the properties  related to two Local Partnerships and a decrease in operating
expenses at one of them; (ii) decreases in real estate taxes, property insurance
expense and maintenance costs at the property related to one Local  Partnership;
(iii) an increase in  operating  expenses at the  property  related to one Local
Partnership;  (iv) decreases in cash distributions recorded as income from three
Local  Partnerships for which the  Partnership's  carrying value is zero (equity
method  suspended);  and (v) the  cessation  of income from a Local  Partnership
whose related property was sold in September 2002.

     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
nine month periods ended  September 30, 2003, did not include losses of $332,684
and $962,344, respectively, compared to excluded losses of $274,103 and $822,306
for the three and nine month periods ended September 30, 2002, respectively.

     No other  significant  changes in the  Partnership's  operations have taken
place during the nine month period ended September 30, 2003.


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

     In October 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-15 and 15d-15.  The  Managing  General  Partner does not
expect that the  Partnership's  disclosure  controls and procedures will prevent
all error and all fraud.  A control  system,  no matter how well  conceived  and
operated,  can provide only  reasonable  assurance  that the  objectives  of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur  because  of simple  error or  mistake.  The  design of any  system of
controls also is based in part upon certain  assumptions about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all  potential  future  conditions.  Over time,
controls may become inadequate  because of changes in conditions,  or the degree
of compliance  with the policies or procedures may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or  fraud  may  occur  and not be  detected.  Based  on the  October  2003
evaluation,  and subject to the foregoing,  the Principal  Executive Officer and
Principal Financial Officer concluded that the Partnership's disclosure controls
and  procedures are effective as of the end of the period covered by this report
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, and
particularly  during  the  period in which  this  report is being  prepared.  In
addition,  there have been no significant changes in the Partnership's  internal
control over financial  reporting that occurred  during the  Partnership's  most
recent fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the Partnership's internal control over financial reporting.

                                      -13-

<PAGE>
Part I. FINANCIAL 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 certain
purchase money notes.


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

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

                           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.

     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.

                               Cash Distributions
                               ------------------

     The Managing General Partner has approved a cash distribution of $1,347,570
($27 per Unit) to Limited  Partner holders of record as of November 1, 2003, and
a cash distribution of $42,000 to General  Partners.  The distributions are from
cash  resources   accumulated  from  operations  and  distributions  from  Local
Partnerships, and will be paid in November 2003.

                                      -14-

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

     a.   Exhibits

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

          31.1           Certification  of  Principal  Executive  Officer,
                         pursuant to 18 U.S.C.  Section 1350,  as adopted
                         pursuant to Section 302 of the Sarbanes-Oxley Act
                         of 2002.

          31.2           Certification of Principal Financial Officer,
                         pursuant to 18 U.S.C. Section 1350, as adopted
                         pursuant to Section 302 of the Sarbanes-Oxley Act
                         of 2002.

          32             Certification of Principal Executive
                         Officer and Principal Financial Officer,
                         pursuant to 18 U.S.C. Section 1350, as
                         adopted pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002.

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

All other Items are not applicable.

                                      -15-

<PAGE>
                                    SIGNATURE


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


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

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




November 4, 2003                       by:  /s/ Michael J. Tuszka
----------------                            ------------------------------------
DATE                                        Michael J. Tuszka
                                              Vice President
                                              and Chief Accounting Officer
                                              (Principal Financial Officer
                                              and Principal Accounting Officer)

                                      -16-