<PAGE>

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


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


For the Quarter Ended    September 30, 1996
                         ------------------


Commission file number      0-13523
                         -------------


                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP
--------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)




           Maryland                                     52-1328767
-----------------------------------------         --------------------
     (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                Identification No.)



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



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


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X]   No [ ]   

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



          Class                         Outstanding at September 30, 1996
----------------------------------      ----------------------------------
     (Not applicable)                             (Not applicable)
<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                               INDEX TO FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1996



                                                                 Page
                                                                 ----

PART I.   Financial Information (Unaudited)

Item 1.   Financial Statements

          Consolidated Balance Sheets - September 30, 1996 and
            December 31, 1995 . . . . . . . . . . . . . . . .        1

          Consolidated Statements of Operations - for the
            three and nine months ended September 30, 1996
            and 1995  . . . . . . . . . . . . . . . . . . . .        2

          Consolidated Statements of Cash Flows - for the
            nine months ended September 30, 1996 and 1995 . .        3

          Notes to Consolidated Financial Statements  . . . .        4

Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations . . . . . . .       14

PART II.  Other Information

Item 3.   Defaults upon Senior Securities . . . . . . . . . .       22

Item 6.   Exhibits and Reports on Form 8-K  . . . . . . . . .       23

Signature   . . . . . . . . . . . . . . . . . . . . . . . . .       24

Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . .       25
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 1.   FINANCIAL STATEMENTS
          --------------------

                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                                                              September 30,     December 31,
                                                                                                  1996             1995
                                                                                              -------------     ------------
                                                                                               (Unaudited)
<S>                                                                                           <C>               <C>
Investments in and advances to partnerships                                                   $  30,853,612     $  33,458,291
Investment in partnerships held for sale                                                                 --         1,479,864
Cash and cash equivalents                                                                        11,126,973         6,801,118
Restricted cash equivalents                                                                         575,900            44,800
Acquisition fees, principally paid to related parties, net of
  accumulated amortization of $351,010 and $365,275, respectively                                   827,189           941,910
Property purchase costs, net of accumulated amortization of
  $339,487 and $348,023, respectively                                                               784,353           880,553
Other assets                                                                                         29,299            14,232
                                                                                              -------------     -------------
      Total assets                                                                            $  44,197,326     $  43,620,768
                                                                                              =============     =============

                               LIABILITIES AND PARTNERS' DEFICIT

Due on investments in partnerships, net of unamortized discount
  on purchase money notes of $17,915,202 and $23,472,463,
  respectively                                                                                $  25,891,141     $  27,313,495
Accrued interest payable                                                                         76,077,470        84,441,538
Distributions payable                                                                             1,999,119                --
Accounts payable and accrued expenses                                                               410,205           116,689
Consulting fees payable to related parties                                                           26,606                --
                                                                                              -------------     -------------
      Total liabilities                                                                         104,404,541       111,871,722
                                                                                              -------------     -------------
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                                                        (5,451,702)       (3,452,583)
    Offering costs                                                                               (7,562,894)       (7,562,894)
    Accumulated loss                                                                           (120,696,119)     (130,738,977)
                                                                                              -------------     -------------
      Total partners' deficit                                                                   (60,207,215)      (68,250,954)
                                                                                              -------------     -------------
      Total liabilities and partners' deficit                                                 $  44,197,326     $  43,620,768
                                                                                              =============     =============
</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

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                 For the three months ended        For the nine months ended
                                                                        September 30,                     September 30,
                                                               -----------------------------     -----------------------------
                                                                   1996            1995              1996            1995
                                                               -------------   -------------     -------------   -------------
<S>                                                            <C>             <C>               <C>             <C>
Share of income from partnerships                              $     104,142   $     226,219     $     651,509   $     498,727
                                                               -------------   -------------     -------------   -------------
Other revenue and  expenses:

 Revenue:
   Interest and other income                                         116,929         106,788           417,796         326,085
                                                               -------------   -------------     -------------   -------------
 Expenses:
   Interest                                                        3,896,106       3,634,939        11,875,434      10,932,795
   Management fee                                                     93,750          93,750           281,250         281,250
   General and administrative                                         46,188          36,602           119,715         130,999
   Professional fees                                                  25,467          24,842            80,345          76,626
   Amortization                                                       15,578          16,497            47,274          49,686
                                                               -------------   -------------     -------------   -------------
                                                                   4,077,089       3,806,630        12,404,018      11,471,356
                                                               -------------   -------------     -------------   -------------
      Total other revenue and expenses                            (3,960,160)     (3,699,842)      (11,986,222)    (11,145,271)
                                                               -------------   -------------     -------------   -------------
Loss before gain on disposition of investment
  in partnerships                                                 (3,856,018)     (3,473,623)      (11,334,713)    (10,646,544)

Gain on disposition of investment in partnerships                 17,021,595              --        21,377,571       3,055,176
                                                               -------------   -------------     -------------   -------------
Net income (loss)                                                 13,165,577      (3,473,623)       10,042,858      (7,591,368)

Accumulated losses, beginning of period                         (133,861,696)   (123,421,200)     (130,738,977)   (119,303,455)
                                                               -------------   -------------     -------------   -------------
Accumulated losses, end of period                              $(120,696,119)  $(126,894,823)    $(120,696,119)  $(126,894,823)
                                                               =============   =============     =============   =============
Income (loss) allocated to General Partners (1.51%)            $     198,800   $     (52,452)    $     151,647   $    (114,630)
                                                               =============   =============     =============   =============
Income (loss) allocated to Initial and Special
  Limited Partners (1.49%)                                     $     196,168   $     (51,757)    $     149,639   $    (113,111)
                                                               =============   =============     =============   =============
Income (loss) allocated to Additional Limited
  Partners (97%)                                               $  12,770,609   $  (3,369,414)    $   9,741,572   $  (7,363,627)
                                                               =============   =============     =============   =============
Income (loss) per unit of Additional Limited
  Partnership Interest based on 73,500 units
  outstanding                                                  $      173.75   $      (45.85)    $      132.54   $     (100.19)
                                                               =============   =============     =============   =============
</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 nine months ended
                                                                                                       September 30,
                                                                                               -----------------------------
                                                                                                   1996             1995
                                                                                               ------------     ------------
<S>                                                                                            <C>              <C>
Cash flows from operating activities:
  Net income (loss)                                                                            $  10,042,858    $ (7,591,368)

  Adjustments to reconcile net loss to net cash
      used in operating activities:
    Share of income from partnerships                                                               (651,509)       (498,727)
    Decrease in accrued interest receivable on
      advances to partnerships                                                                           148          41,043
    Amortization of deferred costs                                                                    47,274          49,686
    Amortization of discount on purchase money notes                                               3,257,308       2,728,942
    Gain on disposition of investment in partnerships                                            (21,377,571)     (3,055,176)
    Payment of purchase money note interest                                                         (278,394)       (293,103)

    Changes in assets and liabilities:
      Increase in other assets                                                                       (15,067)        (43,461)
      Increase in accrued interest payable                                                         8,618,127       8,218,236
      Increase in accounts payable and accrued expenses                                              320,122          48,036
                                                                                               ------------     ------------
         Net cash used in operating activities                                                      (36,704)        (395,892)
                                                                                               ------------     ------------
Cash flows from investing activities:
  Receipt of distributions from partnerships                                                        747,244          739,640
  Repayment of advances to partnerships                                                             143,804               --
  Increase of restricted cash equivalents                                                          (531,100)
  Net proceeds from disposition of investment in partnerships                                    11,819,024        1,495,721
                                                                                               ------------     ------------
         Net cash provided by investing activities                                               12,178,972        2,235,361
                                                                                               ------------     ------------
Cash flows from financing activities:
  Distribution paid to additional limited partners                                                       --         (745,290)
  Payment of purchase money note principal                                                           (8,865)         (46,930)
  Pay-off of purchase money notes                                                                (7,807,548)              --
                                                                                               ------------     ------------
          Net cash used in financing activities                                                  (7,816,413)        (792,220)
                                                                                               ------------     ------------
Net increase in cash and cash equivalents                                                         4,325,855        1,047,249
Cash and cash equivalents, beginning of period                                                    6,801,118        5,435,555
                                                                                               ------------     ------------
Cash and cash equivalents, end of period                                                       $ 11,126,973     $  6,482,804
                                                                                               ============     ============
</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

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of C.R.I., Inc. (CRI), the Managing General Partner, the
accompanying unaudited consolidated financial statements of Capital Realty
Investors-IV Limited Partnership (the Partnership) contain all adjustments of a
normal recurring nature necessary to present fairly the Partnership's
consolidated financial position as of September 30, 1996 and December 31, 1995
and the consolidated results of its operations for the three and nine months
ended September 30, 1996 and 1995 and its consolidated cash flows for the nine
months ended September 30, 1996 and 1995.

     These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission.  Certain
information and note disclosures normally included in consolidated financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted.  While the Managing General Partner believes
that the disclosures presented are adequate to make the information not mis-
leading, it is suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes included in
the Partnership's Annual Report filed on Form 10-K for the year ended December
31, 1995.

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

     The Partnership's obligations with respect to its investments in Local
Partnerships, in the form of purchase money notes having a principal balance of
$43,806,343 (exclusive of unamortized discount on purchase money notes of
$17,915,202) plus accrued interest of $76,077,470 as of September 30, 1996, 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.  Purchase money notes in
an aggregate principal amount of $1,370,000 matured in 1994 but have not been
paid, as discussed below.  Purchase money notes in an aggregate principal amount
of $1,330,000 mature on August 31, 1997, as discussed below.  The remaining
purchase money notes mature from 1999 to 2026.  The purchase money notes 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 Local Partnership.  The Managing General Partner is continuing to
investigate possible alternatives to reduce the Partnership's long-term debt
obligations.  These alternatives include, among others, retaining the cash
available for distribution to meet the purchase money note requirements, buying
out certain purchase money notes at a discounted price, extending the due dates
of certain purchase money notes, or refinancing the respective properties'
underlying debt and using the Partnership's share of the proceeds to pay off or
buy down certain purchase money note obligations.

     Interest expense on the Partnership's purchase money notes for the three
and nine months ended September 30, 1996 was $3,896,106 and $11,875,434
respectively and for the three and nine months ended September 30, 1995 was
$3,634,939 and $10,932,795, respectively.  Amortization of the imputed interest
on purchase money notes increased interest expense during the three and nine


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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

months ended September 30, 1996 by $1,074,829 and $3,257,308 and by $902,444 and
$2,728,942 for the three and nine months ended September 30, 1995, respectively.

     Purchase money notes plus accrued interest relating to Redden Development
Company (Redden Gardens) in the principal amount of $1,330,000 mature on August
31, 1997.  The Managing General Partner is currently analyzing its options with
respect to these purchase money notes.

     On March 15, 1993, the local general partner of River Run Company (River
Run) filed a notice of intent to participate under the Low Income Housing
Preservation and Resident Homeownershp Act of 1990 (LIHPRHA).  On February 27,
1996, the local managing general partner's plan of action regarding the sale of
River Run under the LIHPRHA program was approved by HUD.  On August 27, 1996,
River Run sold the property, a 100-unit apartment complex located in Macomb,
Illinois, under the LIHPRHA program to National Handicap Housing Institute,
Inc., a non-profit entity.  The sale of the property generated net cash proceeds
to the Partnership of approximately $552,000.  The proceeds were net of
approximately $530,000 used to retire, at a discount, the Partnership's purchase
money note obligation with respect to the property.  The sale provided proceeds
to the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of $1,445,203, of which
$404,670 resulted from the retirement of the purchase money note obligation with
respect to the property.  The tax gain is estimated to be approximately $3.0
million.   The Managing General Partner of the Partnership and/or its affiliates
are expected to receive net fees of approximately $26,606 for its services
relating to the sale or River Run.  As of October 25, 1996 these fees had not
been paid.

     On May 23, 1994, the local general partner of New Forest Park Associates
Limited Partnership (Forest Park) filed a notice of intent to participate under
LIHPRHA.  On July 11, 1996, the local managing general partner's plan of action
regarding the sale of Forest Park under the LIHPRHA program was approved by HUD.
On September 19, 1996, Forest Park sold the property, a 284-unit apartment
complex located in New Orleans, Louisiana, under the LIHPRHA program to Forest
Park Affordable Housing Inc., a District of Columbia non-profit organization. 
The sale of the property generated net cash proceeds to the Partnership of
approximately $1.2 million.  The proceeds were net of approximately $1.7 million
used to retire, at a discount, a portion of the Partnership's purchase money
note obligation with respect to the property.  The proceeds were also net of
$531,100 which was used to purchase a certificate of deposit to be held in
escrow until January 2, 1997, at which time all principal and interest accrued
up to three percent per annum on the certificate of deposit shall be used to
retire the Partnership's remaining purchase money note obligation with respect
to the property.  Any excess interest that has accrued on the certificate of
deposit shall be payable to the Partnership.  Accordingly, the accompanying
financial statements include $531,100 of restricted cash equivalents, which
represents principal which will be due on January 2, 1997, in accordance with
the escrow agreement.  The sale provided proceeds to the Partnership in excess
of its investment in the Local Partnership, and resulted in a net financial
statement gain in 1996 of $7,150,043, of which $4,825,355 resulted from the
retirement of the purchase money note obligation with respect to the property. 
The tax gain is estimated to be approximately $10.1 million.   The Managing
General Partner of the Partnership and/or its affiliates did not receive any
fees relating to the sale. 


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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     On May 23, 1994, the local general partner of New Walnut Square Associates
Limited Partnership (Walnut Square) filed a notice of intent to participate
under LIHPRHA.  On July 11, 1996, the local managing general partner's plan of
action regarding the sale of Walnut Square under the LIHPRHA program was
approved by HUD.  On September 19, 1996, Walnut Square sold the property, a 284-
unit apartment complex located in New Orleans, Louisiana, under the LIHPRHA
program to Walnut Square Affordable Housing, Inc., a District of Columbia non-
profit entity.  The sale of the property generated net cash proceeds to the
Partnership of approximately $966,000.  The proceeds were net of $2.241 million
used to retire, at a discount, the Partnership's purchase money note obligation
with respect to the property.  The sale provided proceeds to the Partnership in
excess of its investment in the Local Partnership, and resulted in a net
financial statement gain in 1996 of $8,426,349, of which $6,834,326 resulted
from the retirement of the purchase money note obligation with respect to the
property.  The tax gain is estimated to be approximately $11.2 million.  The
Managing General Partner of the Partnership and/or its affiliates did not
receive any fees relating to the sale.

     On May 22, 1992, Clearfield Hills I Limited Partnership (Clearfield Hills
I) filed a notice of intent to participate under LIHPRHA.  The sale of the
property was completed on February 6, 1996.  The sale price of approximately
$3.2 million generated sufficient proceeds to the Partnership to retire, at a
discount, the purchase money note obligation of the Partnership with respect to
such property, which matured on October 30, 1994.  The sale provided proceeds to
the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of $1,766,498, of which
$50,107 resulted from the retirement of the purchase money note obligation with
respect to the property.  The tax gain is estimated to be approximately $2.4
million.  The Managing General Partner and/or its affiliates did not receive any
fees for services relating to the sale.

     On March 1, 1994, New Village Apartments North (Village North) filed a
notice of intent to participate under the LIHPRHA program.  The sale of the
property was completed on February 6, 1996.  The sale price of approximately
$2.86 million generated sufficient proceeds to the Partnership to retire, at a
discount, the purchase money note obligation of the Partnership with respect to
such property, which matured on September 27, 1994.  The sale provided proceeds
to the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of $2,589,478, of which
$1,452,591 resulted from the retirement of the purchase money note obligation
with respect to the property.  The tax gain is estimated to be approximately
$3.3 million.  The Managing General Partner and/or its affiliates did not
receive any fees for services relating to the sale.

     On October 31, 1996, the Partnership distributed approximately $2 million
(or approximately $27.20 per Additional Limited Partner unit) to the Additional
Limited Partners from the proceeds of the sales of Clearfield Hills I, Village
North, River Run, Forest Park and Walnut Square.  The Managing General Partner
intends to retain all of the Partnership's remaining undistributed net sale
proceeds for the possible repayment, prepayment or purchase of the Partnership's
outstanding purchase money notes related to other Local Partnerships.

     On May 11, 1992, Southgate Apartments Company (Southgate) filed a plan of
action under Title II of the Emergency Low Income Housing Preservation Act of
1987 to sell the real estate to a non-profit entity.  The sale was completed on

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

January 31, 1995.  The sale price of approximately $9.3 million generated
sufficient proceeds to the Partnership to retire, at a discount, the purchase
money note obligation of the Partnership with respect to such property.  The
sale provided proceeds to the Partnership in excess of its investment in the
Local Partnership, and resulted in a net financial statement gain in 1995 of
$3,055,176, of which $214,343 resulted from the retirement of the purchase money
note obligation with respect to the property, and a net tax gain of $6,982,026. 
The Partnership distributed $745,290 (or $10.14 per Additional Limited Partner
unit) on April 28, 1995 to the Additional Limited Partners.  The Managing
General Partner intends to retain all of the Partnership's remaining
undistributed net sale proceeds for the repayment, prepayment or purchase of
purchase money notes of other Local Partnerships, as discussed above.  The
General Partner and/or its affiliates received net fees for services relating to
the sale of $186,512 on February 2, 1995.

     The Partnership defaulted on its purchase money note relating to Holiday
Village Apartments on July 27, 1994 when the note matured and was not paid.  The
defaulted amount included principal and accrued interest of $1,370,000 and
$2,862,342, respectively.  As of October 31, 1996, principal and accrued
interest totalling $1,370,000 and $4,078,005, respectively, were due.  In June
1994, an offer was made to extend the maturity date of this note to coincide
with the future sale of the property under the LIHPRHA program or refinancing of
the first mortgage.  There is no assurance that a sale will take place under the
LIHPRHA program.  The Managing General Partner and the noteholder continue to
negotiate a settlement, and as of October 31, 1996, negotiations between the
Managing General Partner and the noteholder were ongoing.  There is no assurance
that an agreement will be reached.  Should the noteholder begin foreclosure
proceedings on the Partnership's interest in the related Local Partnership, the
Partnership intends to vigorously defend any action by the noteholder.  However,
there is no assurance that the Partnership will be able to retain its interest
in the Local Partnership.  The uncertainty about the continued ownership of the
Partnership's interest in the related Local Partnership does not impact the
Partnership's financial condition because the related purchase money note is
nonrecourse and secured solely by the Partnership's interest in the Local
Partnership.  Therefore, should the investment in Holiday Village Apartments not
produce sufficient value to satisfy the related purchase money note, the
Partnership's exposure to loss is limited since the amount of the nonrecourse
indebtedness exceeds the carrying amount of the investment in and advances to
the Local Partnership.  Thus, even a complete loss of this investment would not
have a material impact on the operations of the Partnership.

     On January 5, 1996, the Managing General Partner received $1,000 for an
option to purchase the Partnership's limited partner interest in New Second
Lakewood Associates Limited Partnership (Second Lakewood).  The sale was
dependent on the purchaser exercising the option by February 15, 1996 and
completing the transaction by March 15, 1996.  On March 15, 1996, the option
holder requested an extension from the Managing General Partner of the February
15th and March 15th deadlines to April 15, 1996 and May 15, 1996, respectively. 
On March 20, 1996, the Managing General Partner agreed to this request and
mailed an amendment to the option holder for signature.  On April 17, 1996,
after receiving no response from the option holder, the Managing General Partner
notified the optionholder that the option to purchase the limited partner
interest was revoked.  On May 3, 1996, the Managing General Partner agreed to
extend the February 15, 1996 and March 15, 1996 deadlines to May 15, 1996 and
June 15, 1996, respectively for another $1,000. As of October 25, 1996, the

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

Managing General Partner and the option holder are negotiating the potential
sale.  There is no assurance that an agreement will be reached.

     In 1989, Second Lakewood experienced rent losses due to units being taken
off the market because of roof leakage. The Partnership advanced a total of
$750,000 during 1990 to fund roof replacement in order to maintain the
marketability and income of the property.  The loan bears interest at 11% and is
to be repaid from the property's cash flow.  As of September 30, 1996 and
December 31, 1995, the outstanding loan to Second Lakewood totalled $80,740 and
$224,543, respectively.  Accrued interest on the loan was $469 and $617 as of
September 30, 1996 and December 31, 1995, respectively.

     The letter of credit related to the tax-exempt bonds on Lakes of Northdale,
which originally matured in June 1995, had been extended to February 15, 1996. 
The letter of credit fee increased from its previous level of 1% per annum to a
maximum of 4% per annum in October 1995.  During June 1996, the Local
Partnership received a new letter of credit with a three-year term and a three-
year renewal option.  In conjunction with the new letter of credit, the
Partnership successfully negotiated with the holder of the related purchase
money note to extend the term thereof to that of the letter of credit.

     Some of the rental properties owned by the Local Partnerships have
mortgages which are federally insured under Section 236 or Section 221(d)(3) of
the National Housing Act, as amended.  These properties may be eligible for
sale, subject to numerous requirements, under LIHPRHA.  This program may provide
incentives to owners of qualifying multifamily housing who commit to permanently
maintain their properties as low to moderate income housing.  Incentives
originally available under LIHPRHA included selling the property to qualified
buyers or obtaining supplemental financing for the property.  On March 28, 1996,
Congress enacted the Housing Opportunity Program Extension Act of 1996 which
includes revisions to the LIHPRHA program.  These revisions include:  (i)
severely limiting the availability of the supplemental financing option for
owners of qualifying multifamily housing, (ii) allowing owners who no longer
qualify for supplemental financing under the revised guidelines to elect to
pursue a sale of the property under the LIHPRHA program, provided that the
election to sell was made by April 15, 1996, and (iii) continuing the funding of
sale transactions under the LIHPRHA program through October 1, 1996, but only
for transactions in which the owner's plan of action is approved by HUD by
August 15, 1996.  HUD has subsequently received appropriations of $175 million
to fund sales of qualifying properties under the LIHPRHA program during the
federal government's fiscal year 1997, which began October 1, 1996.  Continued
funding of the LIHPRHA program after fiscal year 1997, however, is uncertain. 
There is no assurance that a sale of any of the properties owned by the Local
Partnerships will occur.

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

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

     Some of the rental properties owned by the Local Partnerships are dependent
on the receipt of housing assistance payments guaranteed by contract under the
HUD Section 8 Housing Assistance Payment (HAP) program.  The level of funding
for the Section 8 HAP program, and HUD-insured multifamily housing in general,
is dependent upon the continuation of appropriations approved by Congress for
subsidy payments.  In March 1996, HUD released a revised version of the
Reinvention Blueprint issued one year ago.  The Reinvention Blueprint contains a
proposal which has come to be known as the "Mark to Market" initiative.  Per
this initiative, HUD is proposing to eliminate the Section 8 HAP contracts on
certain properties, under which the property owners directly receive monthly
subsidies for units occupied by low-income tenants.  Instead, HUD would provide
voucher or certificate rental assistance directly to eligible residents.  In the
event that the Section 8 HAP program is eliminated or funding of Section 8 HAP
contracts of rental properties owned by the Local Partnerships is discontinued,
there is no assurance that the rental properties will be able to maintain the
occupancy levels necessary to pay debt service and operating costs or that the
rents necessary to pay debt service and operating costs will be competitive with
rents for comparable units in the rental properties' respective market areas. 
As of October 25, 1996, Congress, the Senate and the Clinton Administration
continue to struggle with the "Mark to Market" legislation.  In the interim,
Congress has authorized a one-year extension of project-based Section 8 HAP
contacts expiring during fiscal years 1996 and 1997.  In light of recent
political scrutiny of appropriations for HUD programs, continued funding of
annual renewals for Section 8 HAP contracts expiring after fiscal year 1997 is
uncertain.

     On August 29, 1996, Equity Resource Bay Fund (Bay Fund), a Massachusetts
Limited Partnership and an Additional Limited Partner in the Partnership, and
affiliates of Bay Fund initiated a tender offer to purchase 2,400 additional
units in the Partnership at a price of $10 per Additional Limited Partner unit. 
Bay Fund which is unaffiliated with CRI, Inc., stated that it made the offer for
the express purpose of holding the limited partnership units for investment
purposes and not with a view to resale.  The purchase offer was determined
solely at the discretion of Bay Fund and does not necessarily represent the fair
market value of each Additional Limited Partner unit.  The Bay Fund and
affiliates' offer expired on September 29, 1996, and as of October 25, 1996, Bay
Fund and affiliates held approximately 2.5% of the Additional Limited Partner
units of the Partnership as a result of their tender offer.

     The following are combined statements of operations for the thirty-eight
and forty-three Local Partnerships in which the Partnership had invested as of
September 30, 1996 and 1995, respectively.  The 1995 statements contain
information on the forty-fourth property, Southgate, and the 1996 statements
contain information on Clearfield Hills I, Village North, River Run, Forest Park
and Walnut Square, through the dates of sale.  The statements are compiled from
information supplied by the management agents of the projects and are unaudited.










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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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

                                                              For the three months ended         For the nine months ended
                                                                     September 30,                      September 30,
                                                            -----------------------------      -----------------------------
                                                                1996             1995              1996             1995
                                                            ------------     ------------      ------------     ------------
<S>                                                         <C>              <C>               <C>              <C>
Revenue:
  Rental revenue                                            $  9,539,308     $  9,780,002      $ 29,099,236     $ 29,531,699
  Other                                                          606,283          497,030         1,675,034        1,424,869
                                                            ------------     ------------      ------------     ------------
                                                              10,145,591       10,277,032        30,774,270       30,956,568
                                                            ------------     ------------      ------------     ------------
Expenses:
  Operating                                                    6,367,741        6,221,560        19,122,335       18,949,978
  Interest                                                     1,987,571        2,166,813         5,972,489        6,506,676
  Depreciation and amortization                                2,000,303        2,033,937         6,026,800        6,116,409
                                                            ------------     ------------      ------------     ------------
                                                              10,355,615       10,422,310        31,121,624       31,573,063
                                                            ------------     ------------      ------------     ------------
Net loss                                                    $   (210,024)    $   (145,278)     $   (347,354)    $   (616,495)
                                                            ============     ============      ============     ============

</TABLE>

     As of September 30, 1996 and December 31, 1995, the Partnership's share of
cumulative losses of eight of the thirty-eight and ten of the forty-three Local
Partnerships, respectively, exceeds the amount of the Partnership's investments
in and advances to those Local Partnerships by $15,733,946 and $14,737,878,
respectively. Since 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.   RELATED-PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement, the Partnership
is obligated to reimburse the Managing General Partner for its direct expenses
in managing the Partnership.  The Partnership paid $18,954 and $78,279 for the
three and nine months ended September 30, 1996, respectively, and $27,511 and
$85,924 for the three and nine months ended September 30, 1995, respectively, as
direct reimbursement of expenses incurred on behalf of the Partnership. 
Additionally, the Partnership is obligated to pay 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, as discussed
above, of $93,750 and $281,250 for the three and nine months ended September 30,
1996 and 1995, respectively.

     The Managing General Partner and/or its affiliates may receive a fee in an
amount of not more than 2% of the sales price of the investment in a Local
Partnership or the property it owns, payable under certain conditions upon the
sale of the investment in a Local Partnership or the property it owns.  The

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

3.   RELATED-PARTY TRANSACTIONS - Continued

payment of the fee is subject to certain restrictions, including achieving a
certain level of sales proceeds and making certain minimum distributions to
limited partners.  The Managing General Partner and/or its affiliates received
net fees for services relating to the sale of the Southgate property of $186,512
on February 2, 1995.  Additionally, the Managing General Partner and/or its
affiliates are expected to receive net fees of $26,606 for services relating to
the sale of the property owned by River Run.  As of October 25, 1996, these fees
have not been paid.  No fees will be paid to the Managing General Partner and/or
its affiliates for services performed in connection with the 1996 sales of
Clearfield Hills I, Village North, Forest Park and Walnut Square.

4.   CONTINGENCIES

     In 1990, CRI, as managing general partner of the Partnership and various
other entities, subcontracted certain property-level asset management functions
for certain properties to Capital Management Strategies, Inc. (CMS).  Among
these properties were properties owned by some of the Local Partnerships in
which the Partnership invested.  CMS was formed by Martin C. Schwartzberg, a
nominal general partner of the Partnership and a former stockholder of CRI, when
he retired from and cashed out of CRI and its related businesses as of January
1, 1990.  Mr. Schwartzberg agreed not to act as a general partner with respect
to any of the CRI-sponsored partnerships, including this Partnership, and has
not done so since that time.  In late 1995, a dispute arose between CRI and CMS
over the funding level of the 1996 contract for CMS.  On November 9, 1995, CRI
filed a complaint against CMS to determine the proper amount of fees to be paid
in 1996 under the asset management agreement.  CMS answered on January 10, 1996,
but asserted no counterclaims.

     Thereafter, Mr. Schwartzberg launched a hostile consent solicitation to be
designated as managing general partner of approximately 125 private partnerships
sponsored by CRI.  On January 18, 1996, Mr. Schwartzberg and CMS filed a
complaint in the Circuit Court of Montgomery County, Maryland (the Circuit
Court), against CRI and Messrs. Dockser and Willoughby (who are general partners
of the Partnership) alleging, among other things, that CRI and Messrs. Dockser
and Willoughby breached the asset management agreement pursuant to which Mr.
Schwartzberg's company, CMS, agreed to perform limited functions related to
property-level issues for a portion of CRI's subsidized housing portfolio
(including some of the properties in which the Partnership invested), by
reducing the proposed budget for 1996.  The Partnership was not named as a
defendant in this action.  Messrs. Dockser and Willoughby entered an answer
denying all of Mr. Schwartzberg's claims.  Messrs. Dockser and Willoughby
publicly responded that Mr. Schwartzberg's suit was motivated by his budget
dispute with CRI and personal animosity.  On February 6, 1996, CRI terminated
the CMS contract for cause.  Mr. Schwartzberg and CMS responded by filing a
motion for injunctive relief in the Circuit Court, asking the court to enjoin
CRI from terminating the contract.  In a ruling issued on February 12, 1996, the
Circuit Court, among other things, refused to grant the injunction requested by
CMS.  On February 12, 1996, the Circuit Court also issued a memorandum opinion
and order enjoining CMS and Mr. Schwartzberg from disclosing information made
confidential under the asset management agreement.

     On June 12, 1996, Mr. Schwartzberg, CRI and others entered an agreement
(which contemplates the execution of a subsequent definitive agreement) to
resolve the disputes between CRI and CMS.  The Partnership was not a signatory
to the agreement.  As part of the resolution, Mr. Schwartzberg withdrew any

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)


4.   CONTINGENCIES - Continued

derogatory statements he made about CRI and its principals.  Upon execution of
the definitive agreement, Mr. Schwartzberg shall withdraw as a General Partner
of this Partnership and his interest will become that of a Special Limited
Partner.  As of October 25, 1996, CRI and Mr. Schwartzberg continue to finalize
the terms of the definitive agreement.


















































                                      -12-
<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 contains information that may be considered forward looking.  This
information contains a number of risks and uncertainties, as discussed herein
and in the Partnership's Annual Report filed on Form 10-K, that could cause
actual results to differ materially.

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

     The Partnership's liquidity, with unrestricted cash resources of
$11,126,973 (or approximately $146.85 per Additional Limited Partner unit) and
$6,801,118 (or approximately $89.76 per Additional Limited Partner unit) as of
September 30, 1996 and December 31, 1995, respectively, along with anticipated
future cash distributions from the Local Partnerships, is expected to meet its
current and anticipated operating cash needs.  As of September 30, 1996,
$575,900 of cash resources was restricted for future interest payments on one of
the purchase money notes and a certificate of deposit and the related interest
which will be payable on January 2, 1997 to retire the Partnership's remaining
purchase money note obligation with respect to the property, as mentioned below.
As of October 25, 1996, 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 a principal balance of
$43,806,343 (exclusive of unamortized discount on purchase money notes of
$17,915,202) plus accrued interest of $76,077,470 as of September 30, 1996, 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.  Purchase money notes in
an aggregate principal amount of $1,370,000 matured in 1994 but have not been
paid, as discussed below.  Purchase money notes in an aggregate principal amount
of $1,330,000 mature on August 31, 1997, as discussed below.  The remaining
purchase money notes mature from 1999 to 2026.  The purchase money notes 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 Local Partnership.  The Managing General Partner is continuing to
investigate possible alternatives to reduce the Partnership's long-term debt
obligations.  These alternatives include, among others, retaining the cash
available for distribution to meet the purchase money note requirements, buying
out certain purchase money notes at a discounted price, extending the due dates
of certain purchase money notes, or refinancing the respective properties'
underlying debt and using the Partnership's share of the proceeds to pay off or
buy down certain purchase money note obligations.

     Purchase money notes plus accrued interest relating to Redden Development
Company (Redden Gardens) in the principal amount of $1,330,000 mature on August
31, 1997.  The Managing General Partner is currently analyzing its options with
respect to these purchase money notes.

     On March 15, 1993, the local general partner of River Run Company (River
Run) filed a notice of intent to participate under the Low Income Housing

                                      -13-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS - Continued
              -----------------------------------

Preservation and Resident Homeownershp Act of 1990 (LIHPRHA).  On February 27,
1996, the local managing general partner's plan of action regarding the sale of
River Run under the LIHPRHA program was approved by HUD.  On August 27, 1996,
River Run sold the property, a 100-unit apartment complex located in Macomb,
Illinois, under the LIHPRHA program to National Handicap Housing Institute,
Inc., a non-profit entity.  The sale of the property generated net cash proceeds
to the Partnership of approximately $552,000.  The proceeds were net of
approximately $530,000 used to retire, at a discount, the Partnership's purchase
money note obligation with respect to the property.  The sale provided proceeds
to the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of $1,445,203, of which
$404,670 resulted from the retirement of the purchase money note obligation with
respect to the property.  The tax gain is estimated to be approximately $3.0
million.   The Managing General Partner of the Partnership and/or its affiliates
are expected to receive net fees of approximately $26,606 for its services
relating to the sale or River Run.  As of October 25, 1996 these fees had not
been paid.

     On May 23, 1994, the local general partner of New Forest Park Associates
Limited Partnership (Forest Park) filed a notice of intent to participate under
LIHPRHA.  On July 11, 1996, the local managing general partner's plan of action
regarding the sale of Forest Park under the LIHPRHA program was approved by HUD.
On September 19, 1996, Forest Park sold the property, a 284-unit apartment
complex located in New Orleans, Louisiana, under the LIHPRHA program to Forest
Park Affordable Housing Inc., a District of Columbia non-profit organization. 
The sale of the property generated net cash proceeds to the Partnership of
approximately $1.2 million.  The proceeds were net of approximately $1.7 million
used to retire, at a discount, a portion of the Partnership's purchase money
note obligation with respect to the property.  The proceeds were also net of
$531,100 which was used to purchase a certificate of deposit to be held in
escrow until January 2, 1997, at which time all principal and interest accrued
up to three percent per annum on the certificate of deposit shall be used to
retire the Partnership's remaining purchase money note obligation with respect
to the property.  Any excess interest that has accrued on the certificate of
deposit shall be payable to the Partnership.  Accordingly, the accompanying
financial statements include $531,100 of restricted cash equivalents, which
represents principal which will be due on January 2, 1997, in accordance with
the escrow agreement.  The sale provided proceeds to the Partnership in excess
of its investment in the Local Partnership, and resulted in a net financial
statement gain in 1996 of $7,150,043, of which $4,825,355 resulted from the
retirement of the purchase money note obligation with respect to the property. 
The tax gain is estimated to be approximately $10.1 million.   The Managing
General Partner of the Partnership and/or its affiliates did not receive any
fees relating to the sale. 

     On May 23, 1994, the local general partner of New Walnut Square Associates
Limited Partnership (Walnut Square) filed a notice of intent to participate
under LIHPRHA.  On July 11, 1996, the local managing general partner's plan of
action regarding the sale of Walnut Square under the LIHPRHA program was
approved by HUD.  On September 19, 1996, Walnut Square sold the property, a 284-
unit apartment complex located in New Orleans, Louisiana, under the LIHPRHA
program to Walnut Square Affordable Housing, Inc., a District of Columbia non-
profit entity.  The sale of the property generated net cash proceeds to the
Partnership of approximately $966,000.  The proceeds were net of $2.241 million
used to retire, at a discount, the Partnership's purchase money note obligation
with respect to the property.  The sale provided proceeds to the Partnership in

                                      -14-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS - Continued
              -----------------------------------

excess of its investment in the Local Partnership, and resulted in a net
financial statement gain in 1996 of $8,426,349, of which $6,834,326 resulted
from the retirement of the purchase money note obligation with respect to the
property.  The tax gain is estimated to be approximately $11.2 million.  The
Managing General Partner of the Partnership and/or its affiliates did not
receive any fees relating to the sale.

     On May 22, 1992, Clearfield Hills I Limited Partnership (Clearfield Hills
I) filed a notice of intent to participate under LIHPRHA.  The sale of the
property was completed on February 6, 1996.  The sale price of approximately
$3.2 million generated sufficient proceeds to the Partnership to retire, at a
discount, the purchase money note obligation of the Partnership with respect to
such property, which matured on October 30, 1994.  The sale provided proceeds to
the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of $1,766,498, of which
$50,107 resulted from the retirement of the purchase money note obligation with
respect to the property.  The tax gain is estimated to be approximately $2.4
million.  The Managing General Partner and/or its affiliates did not receive any
fees for services relating to the sale.

     On March 1, 1994, New Village Apartments North (Village North) filed a
notice of intent to participate under the LIHPRHA program.  The sale of the
property was completed on February 6, 1996.  The sale price of approximately
$2.86 million generated sufficient proceeds to the Partnership to retire, at a
discount, the purchase money note obligation of the Partnership with respect to
such property, which matured on September 27, 1994.  The sale provided proceeds
to the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of $2,589,478, of which
$1,452,591 resulted from the retirement of the purchase money note obligation
with respect to the property.  The tax gain is estimated to be approximately
$3.3 million.  The Managing General Partner and/or its affiliates did not
receive any fees for services relating to the sale.

     On October 31, 1996, the Partnership distributed approximately $2 million
(or approximately $27.20 per Additional Limited Partner unit) to the Additional
Limited Partners from the proceeds of the sales of Clearfield Hills I, Village
North, River Run, Forest Park and Walnut Square.  The Managing General Partner
intends to retain all of the Partnership's remaining undistributed net sale
proceeds for the possible repayment, prepayment or purchase of the Partnership's
outstanding purchase money notes related to other Local Partnerships.

     On May 11, 1992, Southgate Apartments Company (Southgate) filed a plan of
action under Title II of the Emergency Low Income Housing Preservation Act of
1987 to sell the real estate to a non-profit entity.  The sale was completed on
January 31, 1995.  The sale price of approximately $9.3 million generated
sufficient proceeds to the Partnership to retire, at a discount, the purchase
money note obligation of the Partnership with respect to such property.  The
sale provided proceeds to the Partnership in excess of its investment in the
Local Partnership, and resulted in a net financial statement gain in 1995 of
$3,055,176, of which $214,343 resulted from the retirement of the purchase money
note obligation with respect to the property, and a net tax gain of $6,982,026. 
The Partnership distributed $745,290 (or $10.14 per Additional Limited Partner
unit) on April 28, 1995 to the Additional Limited Partners.  The Managing
General Partner intends to retain all of the Partnership's remaining
undistributed net sale proceeds for the repayment, prepayment or purchase of
purchase money notes of other Local Partnerships, as discussed above.  The

                                      -15-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS - Continued
              -----------------------------------

General Partner and/or its affiliates received net fees for services relating to
the sale of $186,512 on February 2, 1995.

     The Partnership defaulted on its purchase money note relating to Holiday
Village Apartments on July 27, 1994 when the note matured and was not paid.  The
defaulted amount included principal and accrued interest of $1,370,000 and
$2,862,342, respectively.  As of October 31, 1996, principal and accrued
interest totalling $1,370,000 and $4,078,005, respectively, were due.  In June
1994, an offer was made to extend the maturity date of this note to coincide
with the future sale of the property under the LIHPRHA program or refinancing of
the first mortgage.  There is no assurance that a sale will take place under the
LIHPRHA program.  The Managing General Partner and the noteholder continue to
negotiate a settlement, and as of October 31, 1996, negotiations between the
Managing General Partner and the noteholder were ongoing.  There is no assurance
that an agreement will be reached.  Should the noteholder begin foreclosure
proceedings on the Partnership's interest in the related Local Partnership, the
Partnership intends to vigorously defend any action by the noteholder.  However,
there is no assurance that the Partnership will be able to retain its interest
in the Local Partnership.  The uncertainty about the continued ownership of the
Partnership's interest in the related Local Partnership does not impact the
Partnership's financial condition because the related purchase money note is
nonrecourse and secured solely by the Partnership's interest in the Local
Partnership.  Therefore, should the investment in Holiday Village Apartments not
produce sufficient value to satisfy the related purchase money note, the
Partnership's exposure to loss is limited since the amount of the nonrecourse
indebtedness exceeds the carrying amount of the investment in and advances to
the Local Partnership.  Thus, even a complete loss of this investment would not
have a material impact on the operations of the Partnership.

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient cash is available for operating requirements. 
For the nine months ended September 30, 1996, the receipt of distributions from
Local Partnerships and net proceeds from the sales of Clearfield Hills I,
Village North, River Run, Forest Park and Walnut Square were adequate to support
operating cash requirements, the pay-off of the related purchase money notes and
an accrued distribution to the Additional Limited Partners.  Cash and cash
equivalents increased for the nine months ended September 30, 1996 primarily due
to the receipt of the net proceeds from the sales of these properties, as
discussed above.

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

     The Partnership's net income for the three months ended September 30, 1996
increased from the corresponding period in 1995 primarily due to the gain on
disposition of River Run, Forest Park and Walnut Square, as discussed above. 
Contributing to the increase in the Partnership's net income was an increase in
interest income due to larger cash and cash equivalent balances in 1996. 
Partially offsetting the increase in the Partnership's net income was an
increase in interest expense as a result of the amortization of imputed
interest.  Also partially offsetting the increase in the Partnership's net
income was a decrease in share of income from partnerships due to increased
landscaping, redecorating and maintenance expenses incurred at one property and
increased maintenance and insurance expenses incurred at another property.  
Also offsetting the increase in the Partnership's net income was an increase in
general and administrative expenses primarily due to increased payroll costs.  

                                      -16-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS - Continued
              -----------------------------------

     The Partnership's net income for the nine months ended September 30, 1996
increased from the corresponding period in 1995 primarily due to the gain on
disposition of Clearfield Hills I, Village North, River Run, Forest Park and
Walnut Square, as discussed above.  Contributing to the increase in the
Partnership's net income was an increase in share of income from partnerships
primarily due to a decrease in one property's mortgage loan interest rate and an
increase in interest income, as discussed above.  Partially offsetting the
increase in the Partnership's net income was an increase in interest expense, as
discussed above.

     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 the Partnership has no further obligation
to advance funds or provide financing to the Local Partnerships.  As a result,
the Partnership's recognized losses for the three and nine months ended
September 30, 1996 did not include losses of $314,653 and $996,068 respectively,
compared to excluded losses of $367,104 and $1,101,319 for the three and nine
months ended September 30, 1995, respectively.

     On January 5, 1996, the Managing General Partner received $1,000 for an
option to purchase the Partnership's limited partner interest in New Second
Lakewood Associates Limited Partnership (Second Lakewood).  The sale was
dependent on the purchaser exercising the option by February 15, 1996 and
completing the transaction by March 15, 1996.  On March 15, 1996, the option
holder requested an extension from the Managing General Partner of the February
15th and March 15th deadlines to April 15, 1996 and May 15, 1996, respectively. 
On March 20, 1996, the Managing General Partner agreed to this request and
mailed an amendment to the option holder for signature.  On April 17, 1996,
after receiving no response from the option holder, the Managing General Partner
notified the optionholder that the option to purchase the limited partner
interest was revoked.  On May 3, 1996, the Managing General Partner agreed to
extend the February 15, 1996 and March 15, 1996 deadlines to May 15, 1996 and
June 15, 1996, respectively for another $1,000. As of October 25, 1996, the
Managing General Partner and the option holder are negotiating the potential
sale.  There is no assurance that an agreement will be reached.

     In 1989, Second Lakewood experienced rent losses due to units being taken
off the market because of roof leakage. The Partnership advanced a total of
$750,000 during 1990 to fund roof replacement in order to maintain the
marketability and income of the property.  The loan bears interest at 11% and is
to be repaid from the property's cash flow.  As of September 30, 1996 and
December 31, 1995, the outstanding loan to Second Lakewood totalled $80,740 and
$224,543, respectively.  Accrued interest on the loan was $469 and $617 as of
September 30, 1996 and December 31, 1995, respectively.

     The letter of credit related to the tax-exempt bonds on Lakes of Northdale,
which originally matured in June 1995, had been extended to February 15, 1996. 
The letter of credit fee increased from its previous level of 1% per annum to a
maximum of 4% per annum in October 1995.  During June 1996, the Local
Partnership received a new letter of credit with a three-year term and a three-
year renewal option.  In conjunction with the new letter of credit, the
Partnership successfully negotiated with the holder of the related purchase
money note to extend the term thereof to that of the letter of credit.

     Some of the rental properties owned by the Local Partnerships have
mortgages which are federally insured under Section 236 or Section 221(d)(3) of

                                      -17-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS - Continued
              -----------------------------------

the National Housing Act, as amended.  These properties may be eligible for
sale, subject to numerous requirements, under LIHPRHA.  This program may provide
incentives to owners of qualifying multifamily housing who commit to permanently
maintain their properties as low to moderate income housing.  Incentives
originally available under LIHPRHA included selling the property to qualified
buyers or obtaining supplemental financing for the property.  On March 28, 1996,
Congress enacted the Housing Opportunity Program Extension Act of 1996 which
includes revisions to the LIHPRHA program.  These revisions include:  (i)
severely limiting the availability of the supplemental financing option for
owners of qualifying multifamily housing, (ii) allowing owners who no longer
qualify for supplemental financing under the revised guidelines to elect to
pursue a sale of the property under the LIHPRHA program, provided that the
election to sell was made by April 15, 1996, and (iii) continuing the funding of
sale transactions under the LIHPRHA program through October 1, 1996, but only
for transactions in which the owner's plan of action is approved by HUD by
August 15, 1996.  HUD has subsequently received appropriations of $175 million
to fund sales of qualifying properties under the LIHPRHA program during the
federal government's fiscal year 1997, which began October 1, 1996.  Continued
funding of the LIHPRHA program after fiscal year 1997, however, is uncertain. 
There is no assurance that a sale of any of the properties owned by the Local
Partnerships will occur.

     Some of the rental properties owned by the Local Partnerships are financed
by state housing agencies.  The Managing General Partner has been working to
develop a strategy to sell or refinance certain properties pursuant to programs
developed by these agencies.  These programs may include opportunities to sell
the property to a qualifying purchaser who would agree to maintain the property
as low to moderate income housing in perpetuity, or to refinance the property,
or to obtain supplemental financing.  The Managing General Partner continues to
monitor these programs to ascertain whether the properties would qualify within
the parameters of the programs and whether the 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 housing assistance payments guaranteed by contract under the
HUD Section 8 Housing Assistance Payment (HAP) program.  The level of funding
for the Section 8 HAP program, and HUD-insured multifamily housing in general,
is dependent upon the continuation of appropriations approved by Congress for
subsidy payments.  In March 1996, HUD released a revised version of the
Reinvention Blueprint issued one year ago.  The Reinvention Blueprint contains a
proposal which has come to be known as the "Mark to Market" initiative.  Per
this initiative, HUD is proposing to eliminate the Section 8 HAP contracts on
certain properties, under which the property owners directly receive monthly
subsidies for units occupied by low-income tenants.  Instead, HUD would provide
voucher or certificate rental assistance directly to eligible residents.  In the
event that the Section 8 HAP program is eliminated or funding of Section 8 HAP
contracts of rental properties owned by the Local Partnerships is discontinued,
there is no assurance that the rental properties will be able to maintain the
occupancy levels necessary to pay debt service and operating costs or that the
rents necessary to pay debt service and operating costs will be competitive with
rents for comparable units in the rental properties' respective market areas. 
As of October 25, 1996, Congress, the Senate and the Clinton Administration
continue to struggle with the "Mark to Market" legislation.  In the interim,
Congress has authorized a one-year extension of project-based Section 8 HAP
contacts expiring during fiscal years 1996 and 1997.  In light of recent
political scrutiny of appropriations for HUD programs, continued funding of

                                      -18-
<PAGE>
PART I.   FINANCIAL INFORMATION
          ---------------------
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          -------------------------------------------------
              CONDITION AND RESULTS OF OPERATIONS - Continued
              -----------------------------------

annual renewals for Section 8 HAP contracts expiring after fiscal year 1997 is
uncertain.

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

                                     General
                                     -------

     In 1990, CRI, as managing general partner of the Partnership and various
other entities, subcontracted certain property-level asset management functions
for certain properties to Capital Management Strategies, Inc. (CMS).  Among
these properties were properties owned by some of the Local Partnerships in
which the Partnership invested.  CMS was formed by Martin C. Schwartzberg, a
nominal general partner of the Partnership and a former stockholder of CRI, when
he retired from and cashed out of CRI and its related businesses as of January
1, 1990.  Mr. Schwartzberg agreed not to act as a general partner with respect
to any of the CRI-sponsored partnerships, including this Partnership, and has
not done so since that time.  In late 1995, a dispute arose between CRI and CMS
over the funding level of the 1996 contract for CMS.  On November 9, 1995, CRI
filed a complaint against CMS to determine the proper amount of fees to be paid
in 1996 under the asset management agreement.  CMS answered on January 10, 1996,
but asserted no counterclaims.

     Thereafter, Mr. Schwartzberg launched a hostile consent solicitation to be
designated as managing general partner of approximately 125 private partnerships
sponsored by CRI.  On January 18, 1996, Mr. Schwartzberg and CMS filed a
complaint in the Circuit Court of Montgomery County, Maryland (the Circuit
Court), against CRI and Messrs. Dockser and Willoughby (who are general partners
of the Partnership) alleging, among other things, that CRI and Messrs. Dockser
and Willoughby breached the asset management agreement pursuant to which Mr.
Schwartzberg's company, CMS, agreed to perform limited functions related to
property-level issues for a portion of CRI's subsidized housing portfolio
(including some of the properties in which the Partnership invested), by
reducing the proposed budget for 1996.  The Partnership was not named as a
defendant in this action.  Messrs. Dockser and Willoughby entered an answer
denying all of Mr. Schwartzberg's claims.  Messrs. Dockser and Willoughby
publicly responded that Mr. Schwartzberg's suit was motivated by his budget
dispute with CRI and personal animosity.  On February 6, 1996, CRI terminated
the CMS contract for cause.  Mr. Schwartzberg and CMS responded by filing a
motion for injunctive relief in the Circuit Court, asking the court to enjoin
CRI from terminating the contract.  In a ruling issued on February 12, 1996, the
Circuit Court, among other things, refused to grant the injunction requested by
CMS.  On February 12, 1996, the Circuit Court also issued a memorandum opinion
and order enjoining CMS and Mr. Schwartzberg from disclosing information made
confidential under the asset management agreement.

     On June 12, 1996, Mr. Schwartzberg, CRI and others entered an agreement
(which contemplates the execution of a subsequent definitive agreement) to
resolve the disputes between CRI and CMS.  The Partnership was not a signatory
to the agreement.  As part of the resolution, Mr. Schwartzberg withdrew any
derogatory statements he made about CRI and its principals.  Upon execution of
the definitive agreement, Mr. Schwartzberg shall withdraw as a General Partner
of this Partnership and his interest will become that of a Special Limited
Partner.  As of October 25, 1996, CRI and Mr. Schwartzberg continue to finalize
the terms of the definitive agreement.

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

     On August 29, 1996, Equity Resource Bay Fund (Bay Fund), a Massachusetts
Limited Partnership and an Additional Limited Partner in the Partnership, and
affiliates of Bay Fund initiated a tender offer to purchase 2,400 additional
units in the Partnership at a price of $10 per Additional Limited Partner unit. 
Bay Fund which is unaffiliated with CRI, Inc., stated that it made the offer for
the express purpose of holding the limited partnership units for investment
purposes and not with a view to resale.  The purchase offer was determined
solely at the discretion of Bay Fund and does not necessarily represent the fair
market value of each Additional Limited Partner unit.  The Bay Fund and
affiliates' offer expired on September 29, 1996, and as of October 25, 1996, Bay
Fund and affiliates held approximately 2.5% of the Additional Limited Partner
units of the Partnership as a result of their tender offer.


PART II.  OTHER INFORMATION
          -----------------
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
          -------------------------------

     The Partnership defaulted on its purchase money note relating to Holiday
Village Apartments on July 27, 1994 when the note matured and was not paid.  The
defaulted amount included principal and accrued interest of $1,370,000 and
$2,862,342, respectively.  As of October 31, 1996, principal and accrued
interest totalling $1,370,000 and $4,078,005, respectively, were due.  In June
1994, an offer was made to extend the maturity date of this note to coincide
with the future sale of the property under the LIHPRHA program or refinancing of
the first mortgage.  There is no assurance that a sale will take place under the
LIHPRHA program.  The Managing General Partner and the noteholder continue to
negotiate a settlement, and as of October 31, 1996, negotiations between the
Managing General Partner and the noteholder were ongoing.  There is no assurance
that an agreement will be reached.  Should the noteholder begin foreclosure
proceedings on the Partnership's interest in the related Local Partnership, the
Partnership intends to vigorously defend any action by the noteholder.  However,
there is no assurance that the Partnership will be able to retain its interest
in the Local Partnership.  The uncertainty about the continued ownership of the
Partnership's interest in the related Local Partnership does not impact the
Partnership's financial condition because the related purchase money note is
nonrecourse and secured solely by the Partnership's interest in the Local
Partnership.  Therefore, should the investment in Holiday Village Apartments not
produce sufficient value to satisfy the related purchase money note, the
Partnership's exposure to loss is limited since the amount of the nonrecourse
indebtedness exceeds the carrying amount of the investment in and advances to
the Local Partnership.  Thus, even a complete loss of this investment would not
have a material impact on the operations of the Partnership.













                                      -20-
<PAGE>
PART II.  OTHER INFORMATION
          -----------------
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

     A report on Form 8-K was filed with the Commission on September 17, 1996
urging investors to consider cash distributions expected to be made resulting
from the sale of three properties by the Partnership during 1996 and
negotiations regarding the sale of three other properties, as of that date, when
assessing the Equity Resources Bay Fund tender offer.

     Additionally, a report on Form 8-K was filed with the Commission on October
4, 1996 regarding the sale of the properties relating to the Partnership's
investment in River Run, Forest Park and Walnut Square.

     All other items are not applicable.
















































                                      -21-
<PAGE>
                                    SIGNATURE


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly 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


October 31, 1996              By:  /s/ Deborah K. Browning
--------------------               ---------------------------------
Date                               Deborah K. Browning
                                   Vice President/Chief Accounting
                                     Officer


                                   Signing on behalf of the Registrant and as
                                   Principal Accounting Officer






































                                      -22-
<PAGE>


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


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

27        Financial Data Schedule         Filed herewith electronically






















































                                      -23-