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






                    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 March 31, 2001


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



                         Commission file number 0-13523

                 CAPITAL REALTY INVESTOR-IV LIMITED PARTNERSHIP
             Organized pursuant to the Laws of the State of Maryland


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



        Internal Revenue Service - Employer Identification No. 52-1328767

                 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-IV LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                      FOR THE QUARTER ENDED MARCH 31, 2001




                                                                           Page
                                                                           ----
Part I - FINANCIAL INFORMATION

Item 1.    Financial Statements

           Consolidated Balance Sheets
               - March 31, 2001 and December 31, 2000......................   1

           Consolidated Statements of Operations and Accumulated Losses
               - for the three months ended March 31, 2001 and 2000........   2

           Consolidated Statements of Cash Flows
               - for the three months ended March 31, 2001 and 2000........   3

           Notes to Consolidated Financial Statements
               - March 31, 2001 and 2000...................................   4

Item 2.    Management's Discussion and Analysis of Financial Condition
               and Results of Operations...................................  18


PART II - OTHER INFORMATION

Item 3.    Defaults upon Senior Securities.................................  23

Item 5.    Other Information...............................................  23

Item 6.    Exhibits and Reports on Form 8-K................................  24

Signature..................................................................  25




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


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS



                                     ASSETS

<TABLE>
<CAPTION>


                                                                                        March 31,      December 31,
                                                                                          2001            2000
                                                                                      -------------    ------------
                                                                                       (Unaudited)
<S>                                                                                   <C>              <C>
Investments in and advances to partnerships .......................................   $  26,358,979    $  26,150,075
Investment in partnerships held for sale ..........................................         474,054          474,054
Investment in partnerships held in escrow .........................................         120,551        4,160,314
Cash and cash equivalents .........................................................       8,204,381        8,049,221
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $343,703 and $338,458, respectively ..........         495,591          500,837
Property purchase costs,
  net of accumulated amortization of $280,490 and $276,267, respectively ..........         395,190          399,413
Sales proceeds receivable .........................................................            --          1,545,628
Other assets ......................................................................           2,146             --
                                                                                      -------------    -------------

      Total assets ................................................................   $  36,050,892    $  41,279,542
                                                                                      =============    =============



                        LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships ................................................   $  30,780,081    $  34,535,081
Accrued interest payable ..........................................................      95,498,329      103,424,862
Accounts payable and accrued expenses .............................................         109,242          474,328
                                                                                      -------------    -------------

      Total liabilities ...........................................................     126,387,652      138,434,271
                                                                                      -------------    -------------

Commitments and contingencies

Partners' capital (deficit):

  Capital paid in:
    General Partners ..............................................................           2,000            2,000
    Limited Partners ..............................................................      73,501,500       73,501,500
                                                                                      -------------    -------------

                                                                                         73,503,500       73,503,500

  Less:
    Accumulated distributions to partners .........................................      (8,388,540)      (8,388,540)
    Offering costs ................................................................      (7,562,894)      (7,562,894)
    Accumulated losses ............................................................    (147,888,826)    (154,706,795)
                                                                                      -------------    -------------

      Total partners' deficit .....................................................     (90,336,760)     (97,154,729)
                                                                                      -------------    -------------

      Total liabilities and partners' deficit .....................................   $  36,050,892    $  41,279,542
                                                                                      =============    =============
</TABLE>



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

                                       -1-

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


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             AND ACCUMULATED LOSSES

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                For the three months ended
                                                                                         March 31,
                                                                              ------------------------------
                                                                                   2001              2000
                                                                              -------------    -------------
<S>                                                                           <C>              <C>
Share of income from partnerships .........................................   $     469,419    $     437,303
                                                                              -------------    -------------

Other revenue and  expenses:

  Revenue:
    Interest ..............................................................         100,641          103,743
                                                                              -------------    -------------

  Expenses:
    Interest ..............................................................       2,660,508        3,158,780
    Management fee ........................................................          93,750           93,750
    General and administrative ............................................          80,517           67,102
    Professional fees .....................................................          42,625           29,661
    Amortization of deferred costs ........................................           9,469           11,812
                                                                              -------------    -------------

                                                                                  2,886,869        3,361,105

      Total other revenue and expenses ....................................      (2,786,228)      (3,257,362)
                                                                              -------------    -------------

Loss before extraordinary gain from extinguishment of debt ................      (2,316,809)      (2,820,059)

Extraordinary gain from extinguishment of debt ............................       9,134,778             --
                                                                              -------------    -------------

Net income (loss) .........................................................       6,817,969       (2,820,059)

Accumulated losses, beginning of period ...................................    (154,706,795)    (163,304,383)
                                                                              -------------    -------------

Accumulated losses, end of period .........................................   $(147,888,826)   $(166,124,442)
                                                                              =============    =============


Net income (loss) allocated to General Partners (1.51%) ...................   $     102,951    $     (42,583)
                                                                              =============    =============

Net income (loss) allocated to Initial and Special Limited Partners (1.49%)   $     101,588    $     (42,019)
                                                                              =============    =============

Net income (loss) allocated to Additional Limited Partners (97%) ..........   $   6,613,430    $  (2,735,457)
                                                                              =============    =============

Net income (loss) per unit of Additional Limited Partner Interest
  based on 73,500 units outstanding .......................................   $       89.98    $      (37.22)
                                                                              =============    =============
</TABLE>


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

                                       -2-

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


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    For the three months ended
                                                                                             March 31,
                                                                                   ---------------------------
                                                                                      2001            2000
                                                                                   -----------    ------------
<S>                                                                                <C>            <C>
Cash flows from operating activities:
  Net income (loss) ............................................................   $ 6,817,969    $(2,820,059)

  Adjustments  to  reconcile  net  income  (loss) to net cash used in  operating
    activities:
    Share of income from partnerships ..........................................      (469,419)      (437,303)
    Amortization of discount on purchase money notes ...........................          --           42,968
    Amortization of deferred costs .............................................         9,469         11,812
    Extraordinary gain from extinguishment of debt .............................    (9,134,778)          --

    Changes in assets and liabilities:
      Increase in other assets .................................................        (2,146)       (61,227)
      Increase in accrued interest payable .....................................     2,660,508      3,115,812
      Payment of purchase money note interest ..................................       (17,500)       (22,709)
      Decrease in accounts payable and accrued expenses ........................      (365,086)       (87,000)
                                                                                   -----------    -----------

        Net cash used in operating activities ..................................      (500,983)      (257,706)
                                                                                   -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ...................................       260,515        325,667
  Decrease in sales proceeds receivable ........................................     1,545,628           --
                                                                                   -----------    -----------

        Net cash provided by investing activities ..............................     1,806,143        325,667
                                                                                   -----------    -----------

Cash flows from financing activities:
  Payment of purchase money note principal .....................................    (1,150,000)          --
                                                                                   -----------    -----------

Net increase in cash and cash equivalents ......................................       155,160         67,961

Cash and cash equivalents, beginning of period .................................     8,049,221      7,607,687
                                                                                   -----------    -----------

Cash and cash equivalents, end of period .......................................   $ 8,204,381    $ 7,675,648
                                                                                   ===========    ===========
</TABLE>


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

                                       -3-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of C.R.I.,  Inc. (CRI), the Managing  General  Partner,  the
accompanying   unaudited   consolidated   financial   statements   reflect   all
adjustments,  consisting  of normal  recurring  accruals,  necessary  for a fair
presentation of the financial  position of Capital Realty  Investors-IV  Limited
Partnership  (the  Partnership)  as of March 31,  2001,  and the  results of its
operations  and its cash flows for the three  months  ended  March 31,  2001 and
2000. The results of operations for the interim period ended March 31, 2001, are
not necessarily indicative of the results to be expected for the full year.

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in conformity  with  accounting  principles  generally  accepted in the
United States and with the instructions to Form 10-QSB.  Certain information and
accounting  policies and  footnote  disclosures  normally  included in financial
statements prepared in conformity with accounting  principles generally accepted
in  the  United  States  have  been  condensed  or  omitted   pursuant  to  such
instructions.  These condensed  consolidated financial statements should be read
in  conjunction  with the  consolidated  financial  statements and notes thereto
included in the Partnership's annual report on Form 10-KSB at December 31, 2000.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

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

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the form of purchase money notes having an aggregate principal
balance of  $30,780,081  plus  aggregate  accrued  interest of $95,498,329 as of
March  31,  2001,  are  payable  in full  upon  the  earliest  of:  (i)  sale or
refinancing of the respective Local Partnership's rental property;  (ii) payment
in full of the respective Local Partnership's permanent loan; or (iii) maturity.

     The maturity  dates of the purchase  money notes  related to the  following
properties were extended during 2001 and 2000.

                                                  Original       Extended
     Property                     Principal       Maturity       Maturity
     --------                    -----------      --------       --------
     Glenridge Gardens           $   690,000      08/01/99       01/01/01
     Chippewa County                 860,000      08/01/99       01/04/01 (2)
     Hometown Village              1,495,000      08/01/99       01/04/01 (1)
     Scoville Center               1,400,000      10/01/99       01/04/01 (1)
     Jewish Federation             1,350,000      10/31/99       10/31/04
     Harborview Apartments         3,000,000      08/01/99       08/01/04
     Cedar Point                   1,320,000      08/30/99       08/30/04
     Thornwood House               1,775,000      08/30/99       08/30/04
     Highland Village              1,100,000      10/31/99       10/31/04


     (1)  Transferred to the noteholder on January 4, 2001.
     (2)  Paid off at a discount on January 4, 2001.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of May 11, 2001.

         Property                            Principal          Maturity
         --------                           ----------          --------
         De Angelis Manor                   $1,015,000          07/01/99
         Matthew XXV                         1,020,000          07/01/99
         Crescent Gardens                      434,000          07/31/99
         Riverview Manor                       740,000          09/30/99
         Canonsburg House                    1,540,000          12/01/99
         Char House                          1,530,000          12/01/99
         Liberty Tower                       1,440,000          12/01/99
         Pilgrim Tower East                  1,650,000          12/01/99
         Wellington Woods                      485,000          12/01/99
         Tradewinds Terrace                    925,000          12/03/99
         Pilgrim Tower North                 2,165,000          04/30/00
         Cottonwood Park                       975,000          01/01/01 (3)
         Valley View                           920,000          01/01/01 (3)
         Westport Village                      840,000          01/01/01 (3)
         Glenridge Gardens                     690,000          01/01/01

     (3)  Extended in accordance with the forbearance agreement.

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

     Property                 Principal          Date            Disposition
     --------                ----------       ----------         -----------
     Holiday Village         $1,370,000       July 2000           Paid off
     Redden Gardens           1,330,000       September 2000      Transferred
     Wollaston Manor          2,125,000       December 2000       Paid off
     Chippewa County            860,000       January 2001        Paid off
     Hometown Village         1,495,000       January 2001        Transferred
     Scoville Center          1,400,000       January 2001        Transferred

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

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

     The following  chart presents  information  related to purchase money notes
which have  matured,  have been  extended to mature,  or are scheduled to mature
through  March 31, 2002,  and which remain  unpaid or  unextended  as of May 11,
2001.  Excluded from the following  chart are purchase money notes which matured
through March 31, 2001, and which have been paid off, cancelled,  or extended on
or before May 11, 2001.

<TABLE>
<CAPTION>


                                                                        Aggregate                 Carrying Amount
                                                Aggregate                Accrued                  of Partnership's
                                                Principal               Interest                  Investments in
                    Number of                    Balance                 Balance                  and Advances to
   Purchase        Underlying                     as of                   as of                   Underlying Local
  Money Note         Local       Percentage       March     Percentage    March      Percentage  Partnerships as of   Percentage
(PMN) Maturity    Partnerships    of Total      31, 2001     of Total    31, 2001     of Total     March 31, 2001      of Total
--------------    ------------   ----------   -----------   ---------- ------------  ----------  ------------------   ----------
<S>               <C>            <C>          <C>           <C>        <C>           <C>         <C>                  <C>
3rd Quarter 1999        7             24%     $ 5,944,000        19%   $16,727,122          18%       $ 9,003,295           34%
4th Quarter 1999        6             20%       7,570,000        25%    22,201,590          23%         4,437,886           17%
2nd Quarter 2000        1              3%       2,165,000         7%    14,283,248          15%         2,513,745            9%
1st Quarter 2001        1              3%         690,000         2%     2,342,895           2%                --           --
                     ----          -----      -----------      ----    -----------       -----        -----------        -----

Total through
 3/31/2002             15            50%      $16,369,000        53%   $55,554,855          58%       $15,954,926 (1)       60%
                     ====         =====       ===========      ====    ===========       =====        ===========        =====

Total, Local
  Partnerships         30 (2)       100%      $30,780,081       100%   $95,498,329         100%       $26,797,337 (1)      100%
                     ====         =====       ===========      ====    ===========       =====        ===========        =====
</TABLE>

(1)  Includes $438,358 for the partnership reported as investment in partnership
     held for sale on the  consolidated  balance  sheets at March 31, 2001,  and
     December 31, 2000.
(2)  Twenty-four of the 30 Local  Partnerships  have related purchase money note
     obligations.

     The  Managing  General  Partner  is  continuing  to  investigate   possible
alternatives to reduce the Partnership's  debt obligations.  These  alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note  requirements,  paying off certain purchase money notes at a
discounted  price,  extending  the due dates of certain  purchase  money  notes,
refinancing  the  respective   properties'   underlying  debt,  or  selling  the
underlying real estate and using the Partnership's  share of the proceeds to pay
or buy down  certain  purchase  money note  obligations.  Although  the Managing
General Partner has had some success  applying these strategies in the past, the
Managing  General Partner cannot assure that these strategies will be successful
in the  future.  If the  Managing  General  Partner  is unable to  negotiate  an
extension  or  discounted  payoff,  in the event that the  purchase  money notes
remain unpaid upon maturity,  the noteholders may have the right to foreclose on
the Partnership's interest in the related Local

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

Partnerships.  In the event of a  foreclosure,  the  excess  of the  nonrecourse
indebtedness  over the carrying  amount of the  Partnership's  investment in the
related Local Partnership would be deemed  cancellation of indebtedness  income,
which would be taxable to Limited Partners at a federal tax rate of up to 39.6%.
Additionally,  in the event of a  foreclosure,  the  Partnership  would lose its
investment in the Local Partnership and, likewise,  its share of any future cash
flow distributed by the Local Partnership from rental operations,  mortgage debt
refinancings,  or the sale of the real estate.  Of the 30 Local  Partnerships in
which  the  Partnership  is  invested  as  of  March  31,  2001,  the  15  Local
Partnerships with associated purchase money notes which mature through March 31,
2002 and which remain unpaid or unextended as of May 11, 2001,  represented  the
following  percentages of the Partnership's  total  distributions  received from
Local  Partnerships  and  share  of  income  from  Local  Partnerships  for  the
immediately preceding two calendar years.

                               Percentage of Total       Partnership's Share of
                             Distributions Received           Income from
     For the Year Ended      from Local Partnerships      Local Partnerships
     ------------------      -----------------------    ----------------------

     December 31, 2000                18%                       $647,659
     December 31, 1999                18%                       $431,365

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

     Interest  expense on the  Partnership's  purchase money notes for the three
month  periods  ended March 31,  2001 and 2000 was  $2,660,508  and  $3,158,780,
respectively.  Amortization  of  discount  on  purchase  money  notes  increased
interest expense for the three month periods ended March 31, 2001 and 2000 by $0
and $42,968,  respectively.  The accrued interest on the purchase money notes of
$95,498,329  and  $103,424,862  as of March  31,  2001 and  December  31,  2000,
respectively,  is due on the  respective  maturity  dates of the purchase  money
notes or earlier, in some instances, if (and to the extent of a portion thereof)
the related Local Partnership has distributable net cash flow, as defined in the
relevant Local Partnership agreement.

                 Canonsburg House, Char House, and Liberty Tower
                 -----------------------------------------------

     The  Partnership  defaulted  on its six  purchase  money  notes  related to
Canonsburg Housing Associates Limited Partnership (Canonsburg House), Char House
Highrise  Association  Limited  Partnership  (Char  House),  and  Liberty  Tower
Associates  Limited  Partnership  (Liberty  Tower) on  December 1, 1999 when the
notes matured and were not paid. The default amount included aggregate principal
and accrued interest of $4,510,000 and $12,951,810,  respectively. As of May 11,
2001,  aggregate  principal and accrued  interest of $4,510,000 and $15,480,463,
respectively,  were due.  The  Partnership  tried to  negotiate  to  extend  the
maturity  date of the  purchase  money notes for up to five years.  However,  on
September  8, 2000,  the  Partnership  received  service  of three  suits by the
noteholder  of one of the notes with  respect to each of the three  partnerships
for  foreclosure  on the  Partnership's  interests.  The  Partnership  filed its
answers on October  24,  2000,  although  it  continues  to  negotiate  with the
plaintiff.  If no  resolution  is reached,  hearings will likely be scheduled in
2001.  No action  has been  taken to date by the  holders  of the three  smaller
purchase money notes.  There is no assurance that an extension will be obtained,
or that the  Partnership  will be able to retain  its  interest  in these  three
properties.

                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                 Chippewa County
                                 ---------------

     The  Partnership  defaulted on its purchase  money note related to Chippewa
County  Housing  Partners  (Chippewa  County)  on  August  1, 1999 when the note
matured and was not paid.  The default  amount  included  principal  and accrued
interest of $860,000 and  $2,297,462,  respectively.  In March 2000, in exchange
for a non-refundable  deposit, the noteholders agreed to forbear from exercising
their  remedies until July 1, 2000. In June 2000, in exchange for a further non-
refundable  deposit,   the  noteholders  agreed  to  continue  to  forbear  from
exercising   their  remedies  until  January  4,  2001.  In  January  2001,  the
Partnership paid off the note at a discount.  The discounted  payoff resulted in
extraordinary  gain from  extinguishment  of debt of  $2,164,719  for  financial
statement  purposes  in 2001,  and in  cancellation  of  indebtedness  income of
approximately $3.3 million for federal tax purposes in 2001.

                                 Cottonwood Park
                                 ---------------

     The  Partnership  defaulted on its  purchase  money note related to Shawnee
Heights Limited  Partnership  (Cottonwood  Park) on August 1, 1999 when the note
matured and was not paid.  The default  amount  included  principal  and accrued
interest of $975,000 and $2,576,421, respectively. As of May 11, 2001, principal
and accrued interest of $975,000 and $3,170,860,  respectively, were due. In May
2000, the noteholders filed suit to foreclose on the  Partnership's  interest in
Cottonwood Park. However, the parties negotiated a forbearance agreement,  which
allowed for a possible  sale of the property  prior to January 31, 2001.  If the
property was not sold,  or if the  purchase  money note was not  otherwise  paid
prior to that date, the noteholders could file a confessed  judgment and thereby
take title to the  Partnership's  interest in Cottonwood  Park. The  noteholders
recently  informed  the  Partnership  that they will not take the  Partnership's
interest  while they  explore sale of the  property  under a contract  signed in
February  2000.  If the sale is  completed,  the  noteholders  will  receive the
Partnership's  net sale proceeds in full  satisfaction of their note, in lieu of
foreclosure.  Currently, the property is scheduled to be sold in May 2001. There
is no assurance  that the sale (and the  discounted  purchase money note payoff)
will occur.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment in Cottonwood Park, the Partnership's basis in the Local Partnership,
along with net unamortized  acquisition fees and property purchase costs,  which
totaled  $474,054,  has been reclassified to investment in partnerships held for
sale in the  accompanying  consolidated  balance  sheets at March  31,  2001 and
December 31, 2000.

                                Crescent Gardens
                                ----------------

     The  Partnership  defaulted  on its two  purchase  money  notes  related to
Crescent Gardens Associates Limited  Partnership  (Crescent Gardens) on July 31,
1999 when the notes  matured  and were not paid.  The  default  amount  included
aggregate   principal   and  accrued   interest  of  $868,000  and   $2,033,388,
respectively. The Partnership successfully negotiated an agreement to extend the
maturity date of one of the purchase  money notes (First  Crescent  Note) in the
original principal amount of $434,000,  effective October 15, 1999.  Pursuant to
the extension  agreement,  the Partnership made payments to the noteholder to be
applied against accrued but unpaid interest.  The agreement extends the maturity
date up to July 31, 2004, subject to semi-annual interest payments,  and reduces
the interest rate of the First Crescent Note. The Partnership has been

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.       INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

contacted  by only one of the holders of the other note (Second  Crescent  Note)
and thus cannot predict the course of action with regard to the Second  Crescent
Note.  As of May 11,  2001,  principal  and accrued  interest  of  $434,000  and
$1,168,592, respectively, were due on the Second Crescent Note. In addition, the
local  managing  general  partner has an offer to purchase the  property  from a
not-for-profit entity.  However, the property is in the Mark-to-Market  program,
and it is likely that a  restructuring  commitment  will be entered into,  which
would  inhibit  the  local  managing  general  partner's  ability  to sell  this
property. There is no assurance that a sale will occur.

                                De Angelis Manor
                                ----------------

     The  Partnership  defaulted on its purchase  money notes  related to Natick
Associates (De Angelis  Manor) on July 1, 1999,  when the notes matured and were
not paid. The default amount included  aggregate  principal and accrued interest
of  $1,015,000  and  $2,670,689,  respectively.  As of May 11,  2001,  aggregate
principal and accrued interest of $1,015,000 and $3,319,302,  respectively, were
due. The Partnership is currently trying to negotiate a discounted payoff of the
purchase  money  notes.  There is no assurance  that a discounted  payoff of the
purchase money notes will be obtained.

                                Glenridge Gardens
                                -----------------

     The  Partnership  defaulted on its purchase money note related to Glenridge
Development  Company (Glenridge Gardens) on August 1, 1999 when the note matured
and was not paid. The default amount included  principal and accrued interest of
$740,000 and  $1,928,809,  respectively.  On June 16, 2000, the  Partnership and
noteholder  agreed to extend the  maturity  date of the  purchase  money note to
January 2001, in exchange for a payment which was applied to the purchase  money
note principal balance.  Under the extension agreement,  documents  transferring
the Partnership's interest in Glenridge Gardens to the noteholder were placed in
escrow  to  be  released  to  the  noteholder  upon  a  future  default  by  the
Partnership.  As of May 11, 2001,  the purchase  money  noteholder has not taken
action to transfer the Partnership's interest in Glenridge Gardens.

     Due to the  possible  transfer of the  Partnership's  interest in the Local
Partnership to the noteholder, the Partnership's basis in the Local Partnership,
along with net unamortized  acquisition fees and property purchase costs,  which
totaled  $36,247,  has been  reclassified to investment in partnerships  held in
escrow in the  accompanying  consolidated  balance  sheets at March 31, 2001 and
December 31, 2000.

                                Highland Village
                                ----------------

     The  Partnership  defaulted on its purchase money notes related to Highland
Village Associates (Highland Village) on October 31, 1999 when the notes matured
and were not paid. The default amount included principal and accrued interest of
$1,100,000 and $4,123,565,  respectively. In April 2001, the Partnership and the
noteholders  agreed to extend the maturity  date of the purchase  money notes to
October 31, 2004.  The  noteholders  retain the right to accelerate the maturity
date of the notes on six months' notice.  The local managing general partner and
the noteholders are jointly exploring various options to refinance with the

                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

Massachusetts  Housing  Finance  Agency (MHFA) the HUD Section 236 interest rate
subsidized  mortgage  loan related to this  property.  The  Partnership  and its
affiliated  general partner will likely not retain any consent rights to approve
any  sale,  refinancing  or  other  restructuring.  There is no  assurance  that
refinancing of the mortgage loan will occur.

                                Hometown Village
                                ----------------

     The  Partnership  defaulted on its purchase  money note related to Hometown
Villages Limited Partnership  (Hometown Village) on August 1, 1999 when the note
matured and was not paid.  The default  amount  included  principal  and accrued
interest of $1,495,000 and $5,010,398,  respectively. In March 2000, in exchange
for a non-refundable  deposit, the noteholders agreed to forbear from exercising
their  remedies  until July 1, 2000.  In June 2000,  in  exchange  for a further
non-refundable  deposit,  the  noteholders  agreed to continue  to forbear  from
exercising   their  remedies  until  January  4,  2001.  In  January  2001,  the
Partnership's  interest in Hometown  Village was transferred to the noteholders.
The  transfer  of  the  Partnership's   interest  in  Hometown  Village  to  the
noteholders  resulted  in  extraordinary  gain  from  extinguishment  of debt of
$4,271,262  for financial  statement  purposes in 2001, and in  cancellation  of
indebtedness  income of  approximately  $7.9 million for federal tax purposes in
2001.

     Due to the transfer of the Partnership's  interest in Hometown Village, the
Partnership's  basis  in the  Local  Partnership,  along  with  net  unamortized
acquisition  fees and property  purchase costs,  which totaled  $3,121,315,  was
reclassified  to investment in partnerships  held in escrow in the  accompanying
consolidated balance sheet at December 31, 2000.

                                Jewish Federation
                                -----------------

     The purchase money note related to Jewish Federation  Apartments Associates
(Jewish Federation), in the principal amount of $1,350,000, was due to mature on
October  31,  1999.  In 1997,  the  Managing  General  Partner  entered  into an
agreement  with the  noteholder  to extend  the  maturity  date for five  years,
subject to the donation and transfer by the Local  Partnership  of an unimproved
portion of the property to an entity  affiliated with the local managing general
partner  and the  noteholder.  On May 21,  1999,  the  noteholder  extended  the
maturity  date of the purchase  money note to April 30,  2000,  and on April 24,
2000,  the noteholder  further  extended the maturity date to April 30, 2001, to
allow time for the donation and transfer to occur.  In 2000,  the local managing
general  partner  received  HUD  approval  for the  donation and transfer of the
unimproved portion of the property,  and the transfer took place effective March
30, 2001.  Upon such transfer,  the maturity date of the purchase money note was
extended to October 31, 2004, in accordance with the 1997 agreement.

                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                   Matthew XXV
                                   -----------

     The  Partnership  defaulted on its purchase money notes related to Diakonia
Associates  (Matthew  XXV) on July 1, 1999,  when the notes matured and were not
paid. The default amount included  aggregate  principal and accrued  interest of
$1,020,000 and $2,695,752, respectively. As of May 11, 2001, aggregate principal
and accrued interest of $1,020,000 and $3,349,162,  respectively,  were due. The
Partnership is currently trying to negotiate a discounted payoff of the purchase
money  notes.  There is no assurance  that a  discounted  payoff of the purchase
money notes will be obtained.

                               Pilgrim Tower East
                               ------------------

     The  Partnership  defaulted on its  purchase  money note related to Pilgrim
Tower East Associates  Limited  Partnership  (Pilgrim Tower East) on December 1,
1999,  when the note  matured  and was not paid.  The  default  amount  included
principal and accrued interest of $1,650,000 and $2,719,372, respectively. As of
May 11, 2001,  principal  and accrued  interest of  $1,650,000  and  $3,017,340,
respectively,  were due. The Partnership is currently  negotiating to extend the
maturity  date of the  purchase  money note for five years,  in  exchange  for a
partial  payment.  Alternatively,  the  Partnership  is  negotiating to sell the
Partnership's interest in Pilgrim Tower East to the noteholder over a three-year
period in exchange for the principal  and accrued  interest  outstanding  on the
purchase money note and an annual  payment on the purchase money note.  There is
no assurance that an extension will be obtained, or that a sale will occur.

                               Pilgrim Tower North
                               -------------------

     The  Partnership  defaulted on its  purchase  money note related to Pilgrim
Tower North Associates  Limited  Partnership  (Pilgrim Tower North) on April 30,
2000  when the note  matured  and was not  paid.  The  default  amount  included
principal and accrued interest of $2,165,000 and $12,480,569,  respectively.  As
of May 11, 2001,  principal and accrued  interest of $2,165,000 and $14,517,008,
respectively,  were due. The Partnership is currently  negotiating to extend the
maturity  date of the  purchase  money note for five years,  in  exchange  for a
partial  payment.  Alternatively,  the  Partnership  is  negotiating to sell the
Partnership's  interest  in  Pilgrim  Tower  North  to  the  noteholder  over  a
three-year period in exchange for the principal and accrued interest outstanding
on the purchase  money note and an annual  payment on the  purchase  money note.
There is no assurance  that an extension  will be obtained,  or that a sale will
occur.

                                 Riverview Manor
                                 ---------------

     The Partnership  defaulted on its purchase money notes related to Riverview
Manor Company Limited  Partnership  (Riverview Manor) on September 30, 1999 when
the notes  matured and were not paid.  The  default  amount  included  aggregate
principal and accrued interest of $740,000 and $1,853,014,  respectively.  As of
May  11,  2001,  aggregate  principal  and  accrued  interest  of  $740,000  and
2,074,839, respectively, were due. The Partnership is currently negotiating with
the  noteholders  for a discounted  payoff of the  purchase  money notes and has
reached  an  agreement  in  principle  which  is being  documented.  There is no
assurance that discounted payoff of the purchase money notes will be obtained.


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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                 Scoville Center
                                 ---------------

     The  Partnership  defaulted on its purchase  money notes  related to Beloit
Housing Partners (Scoville Center) on October 1, 1999 when the notes matured and
were not paid. The default  amount  included  principal and accrued  interest of
$1,400,000  and  $2,123,397,  respectively.  In March 2000,  in  exchange  for a
non-refundable  deposit, the noteholders agreed to forbear from exercising their
remedies  until  July 1, 2000.  In June 2000,  in  exchange  for a further  non-
refundable  deposit,   the  noteholders  agreed  to  continue  to  forbear  from
exercising   their  remedies  until  January  4,  2001.  In  January  2001,  the
Partnership's interest in Scoville Center was transferred to the noteholder. The
transfer of the  Partnership's  interest in Scoville  Center to the  noteholders
resulted in  extraordinary  gain from  extinguishment  of debt of $2,698,797 for
financial  statement  purposes in 2001,  and in a cancellation  of  indebtedness
income of approximately $5.9 million for federal tax purposes in 2001.

     Due to the transfer of the Partnership's  interest in Scoville Center,  the
Partnership's  basis  in the  Local  Partnership,  along  with  net  unamortized
acquisition  fees and  property  purchase  cost,  which  totaled  $918,448,  was
reclassified  to investment in partnerships  held in escrow in the  accompanying
consolidated balance sheet at December 31, 2000.

                               Tradewinds Terrace
                               ------------------

     The Partnership  defaulted on its purchase money note related to Tradewinds
West LDHA Limited Partnership (Tradewinds Terrace) on December 3, 1999, when the
note matured and was not paid. The default amount included principal and accrued
interest of $925,000 and $1,228,429, respectively. As of May 11, 2001, principal
and accrued  interest of $925,000 and  $1,335,812,  respectively,  were due. The
Partnership is currently  negotiating a discounted  payoff of the purchase money
note. There is no assurance that a discounted payoff will be obtained.

                                   Valley View
                                   -----------

     The  Partnership  defaulted on its purchase  money notes  related to Valley
View  Associates  (Valley  View) on September 1, 1999 when the notes matured and
were not paid. The default  amount  included  principal and accrued  interest of
$920,000 and $1,788,829, respectively. As of May 11, 2001, principal and accrued
interest of $920,000 and $2,005,269, respectively, were due. The Partnership has
been sued by the noteholders for payment and for confirmation of the transfer of
the collateral to the noteholders.  On January 7, 2000, the Partnership  filed a
motion to  dismiss  the suit.  The  noteholders  subsequently  filed an  amended
complaint  seeking  confirmation  of  the  transfer  of  the  collateral  to the
noteholders but not seeking payment.  On February 9, 2000, the Partnership filed
a motion to dismiss the amended complaint,  which was granted. A further amended
complaint  and motion to dismiss  have been  filed,  but no ruling on the latest
motion has been made as of May 11, 2001.  The  Partnership  and the  noteholders
have agreed in principle that the  Partnership  will deposit  assignments of its
interests in Valley View in escrow,  together with an option agreement  pursuant
to which the noteholders may purchase the interests for the outstanding  debt if
the property is not sold and/or the notes are not repaid by January 2001.  There
is no assurance that any settlement will be finalized.

                                      -12-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     Due to the impending transfer of the Partnership's interest in Valley View,
the net  unamortized  amounts of acquisition  fees and property  purchase costs,
which totaled $37,315,  has been reclassified to investment in partnerships held
in escrow in the accompanying  consolidated balance sheets at March 31, 2001 and
December 31, 2000.

                                Wellington Woods
                                ----------------

     The  Partnership  defaulted on its purchase money notes related to Clarkson
Associates  of  Wellington  Woods  Limited  Partnership  (Wellington  Woods)  on
December 1, 1999,  when the notes matured and were not paid.  The default amount
included  aggregate  principal and accrued  interest of $485,000 and $2,169,679,
respectively.  As of May 11, 2001,  aggregate  principal and accrued interest of
$485,000  and  $2,646,883,  respectively,  were due.  The  Partnership  had been
negotiating  with the  noteholders  to extend the maturity  date of the purchase
money note for five years, in exchange for a partial payment.

     In August, 2000, one of the purchase money noteholders sued the Partnership
for damages and  foreclosure of the security  interests in the Wellington  Woods
Local  Partnership.  Subsequently,  the plaintiff and the second  purchase money
noteholder filed an amended complaint. In late April 2001, the parties agreed in
principle  to a  settlement  involving  extension  of the  maturity  date of the
purchase money notes to January 2, 2004, in exchange for a partial payment.  The
Partnership's  interest  in the Local  Partnership  will be held in escrow.  The
noteholders  will have an option to  acquire  the  interest  after the  extended
maturity  date of the notes for their  then  current  balances.  The  settlement
documents are being  negotiated.  There can be no assurance  that the settlement
will be consummated.

                                Westport Village
                                ----------------

     The  Partnership  defaulted on its purchase money notes related to Westport
Associates  (Westport  Village) on September 1, 1999 when the notes  matured and
were not paid. The default  amount  included  principal and accrued  interest of
$840,000 and $1,615,644, respectively. As of May 11, 2001, principal and accrued
interest of $840,000 and $1,812,273, respectively, were due. The Partnership has
been sued by the noteholders for payment and for confirmation of the transfer of
the collateral to the noteholders.  On January 7, 2000, the Partnership  filed a
motion to  dismiss  the suit.  The  noteholders  subsequently  filed an  amended
complaint  seeking  confirmation  of  the  transfer  of  the  collateral  to the
noteholders but not seeking payment.  On February 9, 2000, the Partnership filed
a motion to dismiss the amended complaint,  which was granted. A further amended
complaint  and motion to dismiss  have been  filed,  but no ruling on the latest
motion has been made as of May 11, 2001.  The  Partnership  and the  noteholders
have agreed in principle that the  Partnership  will deposit  assignments of its
interests  in  Westport  Village in escrow,  together  with an option  agreement
pursuant to which the noteholders may purchase the interests for the outstanding
debt if the  property  was not sold  and/or  the notes  were not repaid by early
January 2001. There is no assurance that any settlement will be finalized.

     Due to the  impending  transfer of the  Partnership's  interest in Westport
Village,  the net unamortized  amounts of acquisition fees and property purchase
costs,   which  totaled  $46,989,   has  been   reclassified  to  investment  in
partnerships held in escrow in the accompanying  consolidated  balance sheets at
March 31, 2001 and December 31, 2000.

                                      -13-


<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                                 Wollaston Manor
                                 ---------------

     The Partnership  defaulted on its purchase money notes related to Wollaston
Manor Associates (Wollaston Manor) on October 1, 1999 when the notes matured and
were not paid.  The default  amount  included  aggregate  principal  and accrued
interest of $2,125,000 and $4,111,380,  respectively. A contract for the sale of
the property was signed in January 2000. On December 28, 2000,  Wollaston  Manor
was sold.  Proceeds  received by the  Partnership  from the sale of the property
were used to pay off,  at a  discount,  the  purchase  money  notes  related  to
Wollaston  Manor. The sale of Wollaston Manor resulted in gain on disposition of
investments  in  partnerships  of  $4,135,937  and in  extraordinary  gain  from
extinguishment of debt of $2,518,332 for financial  statement  purposes in 2000,
and in a total gain of  $8,868,806  for federal tax purposes in 2000. In January
2001,  the  Managing  General  Partner  was paid a  disposition  fee of $186,682
relating to the sale.

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

     To cover operating  deficits  incurred in prior years by Lakes of Northdale
Limited  Partnership  (Lakes  of  Northdale),  the  Partnership  advanced  funds
totaling  $54,500 as of both March 31, 2001 and December  31, 2000.  No advances
have been made to Lakes of Northdale since September  1989.  These  non-interest
bearing  advances are payable from cash flow of Lakes of Northdale after payment
of first  mortgage debt service and after  satisfaction  by the  Partnership  of
certain other  interest  obligations on the purchase money notes relating to the
Local Partnership.  For financial reporting  purposes,  these advances have been
reduced  to  zero  by the  Partnership  as a  result  of  losses  at  the  Local
Partnership level during prior years.

c.   Summarized financial information
     --------------------------------

     Combined  statements of operations for the 30 and 35 Local  Partnerships in
which the Partnership was invested as of March 31, 2001 and 2000,  respectively,
follow. The combined statements have been compiled from information  supplied by
the management agents of the projects and are unaudited.

                                      -14-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

                        COMBINED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                              For the three months ended
                                                       March 31,
                                             -----------------------------
                                                2001               2000
                                             ----------         ----------

Revenue:
  Rental                                     $7,741,323         $8,698,976
  Other, principally interest                   589,313            586,778
                                             ----------         ----------

    Total revenue                             8,330,636          9,285,754
                                             ----------         ----------


Expenses:
  Operating and other                         5,096,234          5,727,874
  Interest                                    1,294,029          1,398,023
  Depreciation and amortization               1,575,684          1,847,338
                                             ----------         ----------

    Total expenses                            7,965,947          8,973,235
                                             ----------         ----------

Net income                                   $  364,689         $  312,519
                                             ==========         ==========


     As of March 31, 2001 and 2000, the Partnership's share of cumulative losses
to date for ten and  six,  respectively,  of the 30 and 35  Local  Partnerships,
respectively,  exceeded  the  amount  of the  Partnership's  investments  in and
advances  to  those  Local   Partnerships   by  $12,992,074   and   $12,698,573,
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 consolidated financial statements.


3.   AFFORDABLE HOUSING LEGISLATION

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

     Mark-to-Market  implementation will reduce rental income at properties that
are currently subsidized at higher-than-market  rental rates, and will therefore
lower cash flow available to meet mortgage payments and operating expenses. Each
affected property may undergo debt  restructuring  according to terms determined
by an individual property and operations  evaluation.  This may involve reducing
the first mortgage loan balance to an amount supportable by the

                                      -15-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


3.   AFFORDABLE HOUSING LEGISLATION - Continued

property,  taking into  account the  property's  operating  expenses and reduced
income. The balance of the amount written down from the first mortgage loan will
be converted to a non-performing but accruing (soft) second mortgage loan.

     Five  properties in which the Partnership is invested as of March 31, 2001,
may be affected by the  Mark-to-Market  program,  since they have  Section 8 HAP
contracts   which,   as  extended,   will  expire  in  2001.  A   Mark-to-Market
restructuring is pending for Crescent Gardens.  Glenridge Gardens, Pilgrim Tower
North, and Tradewinds  Terrace renewed their Section 8 HAP contracts,  to expire
in 2001.  Cottonwood Park did not renew its Section 8 HAP contract for six units
when it expired in 1999. All five properties  have related  purchase money notes
which have matured, as discussed in Note 2.a. However,  the oversight department
administering the Mark-to- Market program is currently scheduled to be dissolved
in September 2001, so there can be no assurance of what may happen thereafter.

     With the  uncertainty  of continued  project-based  Section 8 subsidies for
properties  with expiring  Section 8 HAP  contracts,  there is no assurance that
rental properties with HAP contract rents in excess of fair market rents will be
able to  maintain  the  rental  income and  occupancy  levels  necessary  to pay
operating costs and debt service. As a result, it is not possible to predict the
impact on the Local  Partnerships'  operations  and the resulting  impact on the
Partnership's investments in and advances to Local Partnerships at this time. As
of March 31, 2001, the carrying amount of the  Partnership's  investments in and
advances to Local Partnerships with Section 8 HAP contracts expiring in 2001 was
$3,559,868.

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

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


4.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $70,468 and
$70,542 for the three month periods ended March 31, 2001 and 2000, respectively,
to the Managing General Partner as direct  reimbursement of expenses incurred on
behalf of the  Partnership.  Such  expenses  are  included  in the  accompanying
consolidated statements of operations as general and administrative expenses.

                                      -16-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2001 and 2000

                                   (Unaudited)


4.   RELATED PARTY TRANSACTIONS - Continued

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The
Partnership  paid the Managing  General  Partner a Management Fee of $93,750 for
each of the three month periods ended March 31, 2001 and 2000, respectively.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than two percent of the sales price of an investment in a Local Partnership
or the property it owns,  payable under certain  conditions  upon the sale of an
investment in a Local  Partnership  or the property it owns.  The payment of the
fee is subject to certain  restrictions,  including the achievement of a certain
level of sales  proceeds and making  certain  minimum  distributions  to limited
partners.  No such  fees were  earned by the  Managing  General  Partner  or its
affiliates for the three month periods ended March 31, 2001 or 2000.


5.   SUBSEQUENT EVENT

     On April 27, 2001, the  Partnership  made a cash  distribution  of $733,670
($10.00 per Unit) to  Additional  Limited  Partners,  to holders of record as of
April 1, 2001. The distribution was a result of the sale of Wollaston Manor.

                                      -17-

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


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

                                     General
                                     -------

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

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

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

     Five  properties in which the Partnership is invested as of March 31, 2001,
may be affected by the  Mark-to-Market  program,  since they have  Section 8 HAP
contracts   which,   as  extended,   will  expire  in  2001.  A   Mark-to-Market
restructuring is pending for Crescent Gardens.  Glenridge Gardens, Pilgrim Tower
North, and Tradewinds  Terrace renewed their Section 8 HAP contracts,  to expire
in 2001.  Cottonwood Park did not renew its Section 8 HAP contract for six units
when it expired in 1999. All five properties  have related  purchase money notes
which have  matured,  as  discussed in Note 2.a. to the  consolidated  financial
statements.  However, the oversight department  administering the Mark-to-Market
program is currently  scheduled to be dissolved in September  2001, so there can
be no assurance of what may happen thereafter.

     With the  uncertainty  of continued  project-based  Section 8 subsidies for
properties  with expiring  Section 8 HAP  contracts,  there is no assurance that
rental properties with HAP contract rents in excess of fair market rents will be
able to maintain the rental income and occupancy levels

                                      -18-

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


necessary  to pay  operating  costs and debt  service.  As a  result,  it is not
possible to predict  the impact on the Local  Partnerships'  operations  and the
resulting  impact on the  Partnership's  investments  in and  advances  to Local
Partnerships  at this time.  As of March 31, 2001,  the  carrying  amount of the
Partnership's  investments in and advances to Local  Partnerships with Section 8
HAP contracts expiring in 2001 was $3,559,868.

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

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

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

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

     The Partnership's liquidity, with unrestricted cash resources of $8,204,381
as of March 31, 2001, along with anticipated  future cash distributions from the
Local  Partnerships,  is  expected  to be  adequate  to  meet  its  current  and
anticipated operating cash needs. On April 27, 2001, the Partnership made a cash
distribution of $733,670 ($10.00 per Unit) to Additional  Limited  Partners,  to
holders of record as of April 1, 2001. The distribution was a result of the sale
of Wollaston Manor. As of May 11, 2001,  there were no material  commitments for
capital expenditures.

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the form of purchase money notes having an aggregate principal
balance of  $30,780,081  plus  aggregate  accrued  interest of $95,498,329 as of
March  31,  2001,  are  payable  in full  upon  the  earliest  of:  (i)  sale or
refinancing of the respective Local Partnership's rental property;  (ii) payment
in full of the respective Local Partnership's permanent loan; or (iii) maturity.

                                      -19-

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


     The maturity  dates of the purchase  money notes  related to the  following
properties were extended during 2001 and 2000.

                                                   Original       Extended
     Property                    Principal         Maturity       Maturity
     --------                    ----------        --------       --------
     Glenridge Gardens           $  690,000        08/01/99       01/01/01
     Chippewa County                860,000        08/01/99       01/04/01 (2)
     Hometown Village             1,495,000        08/01/99       01/04/01 (1)
     Scoville Center              1,400,000        10/01/99       01/04/01 (1)
     Jewish Federation            1,350,000        10/31/99       10/31/04
     Harborview Apartments        3,000,000        08/01/99       08/01/04
     Cedar Point                  1,320,000        08/30/99       08/30/04
     Thornwood House              1,775,000        08/30/99       08/30/04
     Highland Village             1,100,000        10/31/99       10/31/04

     (1) Transferred to the noteholders on January 4, 2001.
     (2) Paid off at a discount on January 4, 2001.

     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of March 31, 2001.

     Property                     Principal        Maturity
     --------                     ----------       --------
     De Angelis Manor             $1,015,000       07/01/99
     Matthew XXV                   1,020,000       07/01/99
     Crescent Gardens                434,000       07/31/99
     Riverview Manor                 740,000       09/30/99
     Canonsburg House              1,540,000       12/01/99
     Char House                    1,530,000       12/01/99
     Liberty Tower                 1,440,000       12/01/99
     Pilgrim Tower East            1,650,000       12/01/99
     Wellington Woods                485,000       12/01/99
     Tradewinds Terrace              925,000       12/03/99
     Pilgrim Tower North           2,165,000       04/30/00
     Cottonwood Park                 975,000       01/01/01 (3)
     Valley View                     920,000       01/01/01 (3)
     Westport Village                840,000       01/01/01 (3)
     Glenridge Gardens               690,000       01/01/01

     (3)  Extended in accordance with the forbearance agreement.

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

     Property               Principal            Date         Disposition
     --------              ----------       --------------    -----------
     Holiday Village       $1,370,000       July 2000         Paid off
     Redden Gardens         1,330,000       September 2000    Transferred
     Wollaston Manor        2,125,000       December 2000     Paid off
     Chippewa County          860,000       January 2001      Paid off
     Hometown Village       1,495,000       January 2001      Transferred
     Scoville Center        1,400,000       January 2001      Transferred

     See the  notes to the  consolidated  financial  statements  for  additional
information concerning these purchase money notes.

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

                                      -20-

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


to pay the purchase money notes'  principal and accrued  interest when due. If a
purchase money note is not paid in accordance  with its terms,  the  Partnership
will  either  have to  renegotiate  the terms of  repayment  or risk  losing its
partnership  interest in the respective Local  Partnership.  In the event that a
purchase money note remains unpaid upon maturity,  the  noteholders may have the
right  to  foreclose  on  the  Partnership's   interest  in  the  related  Local
Partnership.  In the  event of a  foreclosure,  the  excess  of the  nonrecourse
indebtedness  over the carrying  amount of the  Partnership's  investment in the
related Local Partnership would be deemed  cancellation of indebtedness  income,
which would be taxable to Limited Partners at a federal tax rate of up to 39.6%.
Additionally,  in the event of a  foreclosure,  the  Partnership  would lose its
investment in the Local Partnership and, likewise,  its share of any future cash
flow distributed by the Local Partnership from rental operations,  mortgage debt
refinancings, or the sale of the real estate.

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

     The following  chart presents  information  related to purchase money notes
which have  matured,  have been  extended to mature,  or are scheduled to mature
through  March 31, 2002,  and which remain  unpaid or  unextended  as of May 11,
2001.  Excluded from the following  chart are purchase money notes which matured
through March 31, 2001, and which have been paid off, cancelled,  or extended on
or before May 11, 2001.

<TABLE>
<CAPTION>


                                                                        Aggregate                 Carrying Amount
                                                Aggregate                Accrued                  of Partnership's
                                                Principal               Interest                  Investments in
                    Number of                    Balance                 Balance                  and Advances to
   Purchase        Underlying                     as of                   as of                   Underlying Local
  Money Note         Local       Percentage       March     Percentage    March      Percentage  Partnerships as of   Percentage
(PMN) Maturity    Partnerships    of Total      31, 2001     of Total    31, 2001     of Total     March 31, 2001      of Total
--------------    ------------   ----------   -----------   ---------- ------------  ----------  ------------------   ----------
<S>               <C>            <C>          <C>           <C>        <C>           <C>         <C>                  <C>
3rd Quarter 1999        7             24%     $ 5,944,000        19%   $16,727,122          18%       $ 9,003,295           34%
4th Quarter 1999        6             20%       7,570,000        25%    22,201,590          23%         4,437,886           17%
2nd Quarter 2000        1              3%       2,165,000         7%    14,283,248          15%         2,513,745            9%
1st Quarter 2001        1              3%         690,000         2%     2,342,895           2%                --           --
                     ----          -----      -----------      ----    -----------       -----        -----------        -----

Total through
 3/31/2002             15            50%      $16,369,000        53%   $55,554,855          58%       $15,954,926 (1)       60%
                     ====         =====       ===========      ====    ===========       =====        ===========        =====

Total, Local
  Partnerships         30 (2)       100%      $30,780,081       100%   $95,498,329         100%       $26,797,337 (1)      100%
                     ====         =====       ===========      ====    ===========       =====        ===========        =====
</TABLE>

(1)  Includes $438,358 for the partnership reported as investment in partnership
     held for sale on the  consolidated  balance  sheets at March 31, 2001,  and
     December 31, 2000.
(2)  Twenty-four of the 30 Local  Partnerships  have related purchase money note
     obligations.

     The  Managing  General  Partner  is  continuing  to  investigate   possible
alternatives to reduce the Partnership's  debt obligations.  These  alternatives
include, among others, retaining the cash available for distribution to meet the
purchase money note  requirements,  paying off certain purchase money notes at a
discounted  price,  extending  the due dates of certain  purchase  money  notes,
refinancing  the  respective   properties'   underlying  debt,  or  selling  the
underlying real estate

                                      -21-

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


and using the  Partnership's  share of the  proceeds to pay or buy down  certain
purchase money note  obligations.  Although the Managing General Partner has had
some success applying these strategies in the past, the Managing General Partner
cannot assure that these  strategies  will be  successful in the future.  If the
Managing  General  Partner is unable to negotiate  an  extension  or  discounted
payoff,  in the event that the purchase money notes remain unpaid upon maturity,
the noteholders may have the right to foreclose on the Partnership's interest in
the related Local Partnerships. In the event of a foreclosure, the excess of the
nonrecourse   indebtedness   over  the  carrying  amount  of  the  Partnership's
investment  in the related Local  Partnership  would be deemed  cancellation  of
indebtedness income, which would be taxable to Limited Partners at a federal tax
rate  of  up  to  39.6%.  Additionally,  in  the  event  of a  foreclosure,  the
Partnership  would lose its investment in the Local  Partnership and,  likewise,
its share of any future  cash flow  distributed  by the Local  Partnership  from
rental operations,  mortgage debt refinancings,  or the sale of the real estate.
Of the 30 Local  Partnerships  in which the  Partnership is invested as of March
31, 2001, the 15 Local  Partnerships with associated  purchase money notes which
mature  through  March 31, 2002 and which remain  unpaid or unextended as of May
11, 2001,  represented  the following  percentages  of the  Partnership's  total
distributions  received from Local  Partnerships  and share of income from Local
Partnerships for the immediately preceding two calendar years.

                             Percentage of Total         Partnership's Share of
                            Distributions Received            Income from
     For the Year Ended     from Local Partnerships        Local Partnerships
     ------------------     -----------------------      ----------------------

     December 31, 2000               18%                       $647,659
     December 31, 1999               18%                       $431,365

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

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the three month periods ended March 31, 2001 and 2000,  net cash provided by
investing  activities was adequate to support operating cash requirements.  Cash
and cash  equivalents  increased  during the three month  period ended March 31,
2001,  as net cash  provided by investing  activities  exceeded net cash used in
operating activities,  and net cash used in financing activities for the payment
of purchase money note principal.

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

2000 Versus 1999
----------------

     The  Partnership  recognized  net income for the three month  period  ended
March 31,  2001,  as compared to net loss for the  corresponding  period in 2000
primarily due to extraordinary  gain from  extinguishment of debt related to the
discounted  payoff of the purchase money note related to Chippewa County Housing
Partners  (Chippewa  County) and the transfers of  partnership  interests to the
purchase money  noteholders  related to Hometown  Villages  Limited  Partnership
(Hometown  Village)  and  Beloit  Housing  Partners  (Scoville  Center),  all as
discussed in the notes to the consolidated financial statements. Contributing to
net income was an increase in share of income  from  partnerships  due to higher
rental income at five properties,  lower operating  expenses at three properties
and the exclusion of loss from one Local  Partnership with zero investment basis
in the 2001  period.  The  increase  in share of income  from  partnerships  was
partially   offset  by  the  cessation  of  share  of  income  from  five  Local
Partnerships  sold or  transferred in 2000,  and cash  distributions  from Local
Partnerships with zero investment basis,  which  distributions  were received in
the first quarter of 2000, but not 2001. Also contributing to net income was a

                                      -22-

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


decrease in  interest  expense due to lower  purchase  money note  balances as a
result  of  the   extinguishment  of  debt.   Offsetting  the  increase  in  the
Partnership's  net income  were an  increase  in  professional  fees  related to
purchase  money note  litigation  and an increase in general and  administrative
expenses related to higher reimbursed payroll costs.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
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 month
periods  ended March 31, 2001 and 2000 did not  include  losses of $183,704  and
$177,741, respectively.

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


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

     See Note 2.a. of the notes to consolidated  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  partnership  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 interests
in the Partnership.

     On December 5, 2000, Equity Resources Lexington Fund (Lexington)  initiated
an unregistered tender offer to purchase  approximately 1,200 of the outstanding
Units in the  Partnership at a price of $40 per Unit; the offer expired  January
3, 2001.  Lexington is unaffiliated with the Partnership or the Managing General
Partner.  The price offered was determined solely at the discretion of Lexington
and does not necessarily represent the fair market value of each Unit.

     In December 2000, Sierra Capital initiated an unregistered  tender offer to
purchase  outstanding  Units in the  Partnership at a price of $50 per Unit; the
offer  expired  January  3,  2001.  Sierra  Capital  is  unaffiliated  with  the
Partnership or the Managing  General  Partner.  The price offered was determined
solely at the  discretion of Sierra Capital and does not  necessarily  represent
the fair market value of each Unit.

     On March 15, 2001, Bond Purchase,  L.L.C.  (Bond) initiated an unregistered
tender offer to purchase  approximately  3,650 of the  outstanding  Units in the
Partnership at a price of $33 per Unit;  the offer expired April 30, 2001.  Bond
is unaffiliated with the Partnership or the Managing General Partner.  The price
offered was determined solely at the discretion of Bond and does not necessarily
represent the fair market value of each Unit.

                                      -23-

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


     The Managing General Partner has not expressed,  and does not express,  any
opinion and remains  neutral  toward any offer for the purchase of Units such as
those described above.

     If more than five percent of the total outstanding Units in the Partnership
are  transferred  due to sale in any one  calendar  year (not  counting  certain
exempt  transfers),  the  Partnership  could  be  taxed  as a  "publicly  traded
partnership,"  with potentially  severe tax implications for the Partnership and
its investors. Specifically, the Partnership could be taxed as a corporation and
the income and  losses  from the  Partnership  would no longer be  considered  a
passive activity.  For the calendar year 2001 to May 11, 2001, Units transferred
have  not  exceeded  4.9%  of  the  total  outstanding  Units,  therefore,   the
Partnership has not halted recognition of transfers.

     On April 27, 2001, the  Partnership  made a cash  distribution  of $733,670
($10.00 per Unit) to  Additional  Limited  Partners,  to holders of record as of
April 1, 2001. The distribution was a result of the sale of Wollaston Manor.


Item 6. Exhibits and Reports on Form 8-K

     a.   None

     b.   No  Reports  on Form 8-K were  filed  with the  Commission  during the
          quarter ended March 31, 2001.

     All other items are not applicable.

                                      -24-

<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-IV LIMITED
                               PARTNERSHIP
                           -----------------------------------------------------
                           (Registrant)

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




May 11, 2001                      by:    /s/ Michael J. Tuszka
-----------------                        ---------------------------------------
DATE                                     Michael J. Tuszka
                                             Vice President
                                             and Chief Accounting Officer
                                             (Principal Financial Officer
                                             and Principal Accounting Officer)

                                      -25-