--------------------------------------------------------------------------------
                    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, 2002


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



                         Commission file number 0-13523

                 CAPITAL REALTY INVESTORS-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, 2002





                                                                           Page

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets
           - March 31, 2002 and December 31, 2001.......................    1

         Consolidated Statements of Operations and Accumulated Losses
           - for the three months ended March 31, 2002 and 2001.........    2

         Consolidated Statements of Cash Flows
           - for the three months ended March 31, 2002 and 2001.........    3

         Notes to Consolidated Financial Statements
           - March 31, 2002 and 2001....................................    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,
                                                                                          2002             2001
                                                                                      -------------    -------------
                                                                                       (Unaudited)
<S>                                                                                   <C>              <C>
Investments in and advances to partnerships .......................................   $  12,617,345    $  13,097,636
Investment in partnerships held for sale ..........................................       3,106,740       10,760,494
Investment in partnerships held in escrow .........................................       3,071,122        3,084,883
Cash and cash equivalents .........................................................       5,692,382        4,816,347
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $214,590 and $249,448, respectively ..........         277,654          332,410
Property purchase costs,
  net of accumulated amortization of $174,120 and $212,838, respectively ..........         217,359          275,379
Other assets ......................................................................             624              163
                                                                                      -------------    -------------

      Total assets ................................................................   $  24,983,226    $  32,367,312
                                                                                      =============    =============



                        LIABILITIES AND PARTNERS' DEFICIT


Due on investments in partnerships ................................................   $  25,580,081    $  27,732,019
Accrued interest payable ..........................................................      90,275,307       94,666,676
Accounts payable and accrued expenses .............................................          91,999          126,219
                                                                                      -------------    -------------

      Total liabilities ...........................................................     115,947,387      122,524,914
                                                                                      -------------    -------------

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 .........................................      (9,122,210)      (9,122,210)
    Offering costs ................................................................      (7,562,894)      (7,562,894)
    Accumulated losses ............................................................    (147,782,557)    (146,975,998)
                                                                                      -------------    -------------

      Total partners' deficit .....................................................     (90,964,161)     (90,157,602)
                                                                                      -------------    -------------

      Total liabilities and partners' deficit .....................................   $  24,983,226    $  32,367,312
                                                                                      =============    =============
</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,
                                                                              ------------------------------
                                                                                  2002              2001
                                                                              -------------    -------------
<S>                                                                           <C>              <C>
Share of income from partnerships .........................................   $     365,798    $     469,419
                                                                              -------------    -------------

Other revenue and  expenses:

  Revenue:
    Interest ..............................................................          14,810          100,641
                                                                              -------------    -------------

  Expenses:
    Interest ..............................................................       2,650,593        2,660,508
    Management fee ........................................................          93,750           93,750
    General and administrative ............................................          97,403           80,517
    Professional fees .....................................................          95,275           42,625
    Amortization of deferred costs ........................................           5,814            9,469
                                                                              -------------    -------------

                                                                                  2,942,835        2,886,869

      Total other revenue and expenses ....................................      (2,928,025)      (2,786,228)
                                                                              -------------    -------------

Loss before loss on disposition of investments in partnerships and
  extraordinary gain from extinguishment of debt ..........................      (2,562,227)      (2,316,809)

Loss on disposition of investments in partnerships ........................         (65,248)            --
                                                                              -------------    -------------

Loss before extraordinary gain from extinguishment of debt ................      (2,627,475)      (2,316,809)

Extraordinary gain from extinguishment of debt ............................       1,820,916        9,134,778
                                                                              -------------    -------------

Net (loss) income .........................................................        (806,559)       6,817,969

Accumulated losses, beginning of period ...................................    (146,975,998)    (154,706,795)
                                                                              -------------    -------------

Accumulated losses, end of period .........................................   $(147,782,557)   $(147,888,826)
                                                                              =============    =============



Net (loss) income allocated to General Partners (1.51%) ...................   $     (12,179)   $     102,951
                                                                              =============    =============


Net (loss) income allocated to Initial and Special Limited Partners (1.49%)   $     (12,018)   $     101,588
                                                                              =============    =============


Net (loss) income allocated to Additional Limited Partners (97%) ..........   $    (782,362)   $   6,613,430
                                                                              =============    =============


Net (loss) income per unit of Additional Limited Partner Interest
  based on 73,500 units outstanding .......................................   $      (10.64)   $       89.98
                                                                              =============    =============
</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,
                                                                                   ---------------------------
                                                                                       2002           2001
                                                                                   ------------   ------------
<S>                                                                                <C>            <C>
Cash flows from operating activities:
  Net (loss) income ............................................................   $  (806,559)   $ 6,817,969

  Adjustments  to  reconcile  net  (loss)  income to net cash used in  operating
    activities:
    Share of income from partnerships ..........................................      (365,798)      (469,419)
    Amortization of deferred costs .............................................         5,814          9,469
    Loss on disposition of investments in partnerships .........................        65,248           --
    Extraordinary gain from extinguishment of debt .............................    (1,820,916)    (9,134,778)

    Changes in assets and liabilities:
      Increase in other assets .................................................          (461)        (2,146)
      Increase in accrued interest payable .....................................     2,650,593      2,660,508
      Payment of purchase money note interest ..................................       (26,849)       (17,500)
      Decrease in accounts payable and accrued expenses ........................       (34,220)      (365,086)
                                                                                   -----------    -----------

        Net cash used in operating activities ..................................      (333,148)      (500,983)
                                                                                   -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ...................................       201,302        260,515
  Proceeds from disposition of investments in partnerships, net ................     4,876,101           --
  Decrease in sales proceeds receivable ........................................          --        1,545,628
                                                                                   -----------    -----------

        Net cash provided by investing activities ..............................     5,077,403      1,806,143
                                                                                   -----------    -----------

Cash flows from financing activities:
  Payment of purchase money note principal .....................................      (200,000)          --
  Payoff of purchase money notes and related interest ..........................    (3,668,220)    (1,150,000)
                                                                                   -----------    -----------

        Net cash used in financing activities ..................................    (3,868,220)    (1,150,000)
                                                                                   -----------    -----------

Net increase in cash and cash equivalents ......................................       876,035        155,160

Cash and cash equivalents, beginning of period .................................     4,816,347      8,049,221
                                                                                   -----------    -----------

Cash and cash equivalents, end of period .......................................   $ 5,692,382    $ 8,204,381
                                                                                   ===========    ===========



Supplemental disclosure of cash flow information:
  Cash paid during the period for interest .....................................   $ 1,743,131    $    17,500
                                                                                   ===========    ===========

</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, 2002 and 2001

                                   (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,  2002,  and the  results of its
operations  and its cash flows for the three  months  ended  March 31,  2002 and
2001. The results of operations for the interim period ended March 31, 2002, 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 of America  and with the  instructions  to Form  10-QSB.  Certain
information and accounting policies and footnote  disclosures  normally included
in  financial  statements  prepared in  conformity  with  accounting  principles
generally  accepted  in the United  States of  America  have been  condensed  or
omitted pursuant to such instructions.  These condensed  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, 2001.


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

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

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

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the  form  of  nonrecourse  purchase  money  notes  having  an
aggregate  principal  balance of $25,580,081 plus aggregate  accrued interest of
$90,275,307  as of March 31, 2002, 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 through May 10, 2002

                                              Original         Extended
Property                   Principal          Maturity         Maturity
--------                  -----------         --------         --------
Jewish Federation         $ 1,350,000         10/31/99 (2)     10/31/04
Highland Village            1,100,000         10/31/99         10/31/04
Canonsburg House (1)        1,440,000         12/01/99         01/03/03
Char House (1)              1,430,000         12/01/99         01/03/03
Liberty Tower (1)           1,340,000         12/01/99         01/03/03
Pilgrim Tower East          1,550,000         12/01/99         11/30/03
Pilgrim Tower North         2,065,000         04/30/00         11/30/02


(1)  Other purchase money notes  relating to these  properties  were paid off in
     October 2001.
(2)  There were interim extensions to April 30, 2000, and April 30, 2001.


                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (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 10, 2002.

Property                  Principal           Maturity
---------                 ----------          --------
Crescent Gardens          $  434,000          07/31/99
Valley View                  920,000          09/01/99 (1)
Westport Village             840,000          09/01/99 (1)
Wellington Woods             485,000          12/01/99
Glenridge Gardens            665,000          01/01/02 (2)

(1)  Extended in accordance with the forbearance agreement.
(2)  Original maturity was August 1, 1999.


     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 2001 and through May 10, 2002.

Property                    Principal         Date                Disposition
---------                  ----------         ------------        -----------
Chippewa County            $  860,000         January 2001        Paid Off
Hometown Village            1,495,000         January 2001        Transferred
Scoville Center             1,400,000         January 2001        Transferred
Cottonwood Park               975,000         May 2001            Paid Off
Tradewinds Terrace            925,000         May 2001            Paid Off
Riverview Manor               740,000         July 2001           Paid Off
Canonsburg House (2)          100,000         October 2001        Paid Off
Char House (2)                100,000         October 2001        Paid Off
Liberty Tower (2)             100,000         October 2001        Paid Off
DeAngelis Manor               973,571 (1)     March 2002          Paid Off
Matthew XXV                   978,367 (1)     March 2002          Paid Off

(1)  Remaining principal after a partial payoff.
(2)  Other purchase money notes  relating to these  properties  were extended to
     mature in January 2003.

     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 noteholder may have the right to foreclose on
the Partnership's interest in the related Local Partnership.

     The  Partnership's  inability  to pay  certain of the  purchase  money note
principal and accrued interest balances when due, and the resulting  uncertainty
regarding the Partnership's  continued  ownership  interest in the related Local
Partnerships,  does not adversely impact the Partnership's  financial  condition
because the  purchase  money  notes are  nonrecourse  and secured  solely by the
Partnership's interest in the related Local Partnerships.  Therefore, should the
investment in any of the Local  Partnerships  with maturing purchase money notes
not produce sufficient value to

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

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, 2003,  and which remain  unpaid or  unextended  as of May 10,
2002.  Excluded from the following  chart are purchase money notes which matured
through March 31, 2002, and which have been paid off, cancelled,  or extended on
or before May 10, 2002.

<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
   Maturity       Partnerships    of Total      31, 2002     of Total     31, 2002     of Total      March 31, 2002       of Total
--------------    ------------   ----------    -----------  ---------    ----------   ----------   ------------------    ----------
<S>               <C>            <C>           <C>          <C>          <C>          <C>          <C>                   <C>
3rd Quarter 1999        3            16%       $ 2,194,000        9%     $ 5,249,548       6%         $        --             0%
4th Quarter 1999        1             6%           485,000        2%       2,978,761       3%             607,868             3%
1st Quarter 2002        1             6%           665,000        3%       2,616,414       3%                  --             0%
3rd Quarter 2002        1             6%         1,500,000        6%       2,568,187       3%                  --             0%
4th Quarter 2002        1             6%         2,065,000        8%      16,502,117      18%           2,403,018            13%
1st Quarter 2003        3            16%         4,210,000       16%      15,931,313      18%           2,858,134            16%
                     ----          ----        -----------     ----      -----------    ----          -----------          ----
Total through
 03/31/2003            10            56%       $11,119,000       44%     $45,846,340      51%         $ 5,869,020            32%
                     ====          ====        ===========     ====      ===========    ====          ===========          ====

Total, Local
  Partnerships         18           100%       $25,580,081      100%     $90,275,307     100%         $17,878,497 (1)       100%
                     ====          ====        ===========     ====      ===========    ====          ===========          ====
</TABLE>

(1)  Includes  $2,902,877  and  $2,432,730  for  the  partnership   reported  as
     investment in  partnerships  held for sale and  $2,858,134  and  $2,871,895
     reported as investment in partnerships  held in escrow on the  consolidated
     balance sheets at March 31, 2002 and December 31, 2001, respectively.

     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 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  38.6%.  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

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

the Local Partnership from rental operations, mortgage debt refinancings, or the
sale of the real estate.  Of the 27 Local  Partnerships in which the Partnership
is invested as of March 31,  2002,  the 10 Local  Partnerships  with  associated
purchase money notes which mature through March 31, 2003 and which remain unpaid
or unextended as of May 10, 2002,  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, 2001                   15%                       $0
December 31, 2000                    8%                       $0


     The  Managing  General  Partner  continues  to  address  the  maturity  and
impending  maturity  of its debt  obligations  and to seek  solutions  that 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
months  ended  March  31,  2002  and  2001  was   $2,650,593   and   $2,660,508,
respectively.  The accrued  interest on the purchase  money notes of $90,275,307
and $94,666,676 as of March 31, 2002 and December 31, 2001, 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.   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
continued  to  negotiate  with the  plaintiff.  The  Partnership  entered into a
settlement  agreement  on October  22,  2001  pursuant  to which it  obtained an
extension of the maturity date of the three larger notes to January 2003.  Under
the extension agreement,  documents transferring the Partnership's  interests in
Canonsburg  House, Char House and Liberty Tower to the noteholder were placed in
escrow to be released to the  noteholder  upon the  earlier of  occurrence  of a
future  default by the  Partnership  on the  purchase  money notes or January 4,
2003. The Partnership  also negotiated a discounted  payoff of the three smaller
notes,  and the funds  were  released  from  escrow on  October  22,  2001.  The
discounted payoffs resulted in an extraordinary gain from extinguishment of debt
of  $1,351,664  for  financial   statement   purposes  and  in  cancellation  of
indebtedness income of $1,351,664 for federal tax purposes in 2001.

                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

     Due to the  possible  transfer of the  Partnership's  interest in the Local
Partnerships  to  the  noteholders,   the  Partnership's   basis  in  the  Local
Partnership's, along with net unamortized acquisition fees and property purchase
costs, which totaled  $1,250,723,  $572,527 and $1,127,322 as of March 31, 2002,
and $1,266,732,  $568,710 and $1,128,890 as of December 31, 2001, for Canonsburg
House,  Char House and Liberty Tower,  respectively,  have been  reclassified to
investment  in  partnerships  held in  escrow in the  accompanying  consolidated
balance sheets.

                                 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 and in cancellation of indebtedness  income of $2,164,719 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. In May 2000, the noteholders
filed suit to  foreclose  on the  Partnership's  interest  in  Cottonwood  Park.
However,  the parties  negotiated an agreement which allowed for a possible sale
of the property. On May 30, 2001, Cottonwood Park was sold. Proceeds received by
the  Partnership  from  the sale of the  property  were  used to pay  off,  at a
discount,  the  purchase  money note  related to  Cottonwood  Park.  The sale of
Cottonwood  Park resulted in gain on disposition of investments in  partnerships
of $719,413 and in extraordinary gain from  extinguishment of debt of $3,029,351
for financial  statement  purposes in 2001,  and a total gain of $4,930,406  for
federal tax purposes in 2001.

                                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 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 10, 2002,

                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

principal and accrued  interest of $434,000 and $1,253,786,  respectively,  were
due on the Second Crescent Note.  Crescent Gardens recently  completed  mortgage
restructuring  under  the  Mark-to-  Market  program,  and the  associated  loan
restructuring  requirement  will  likely  inhibit  the  local  managing  general
partner's  ability to sell this property.  It is  anticipated  that the property
will now operate at a break-even  level, and that future cash  distributions are
highly unlikely.

                                 DeAngelis Manor
                                 ---------------

     The  Partnership  defaulted on its purchase  money notes  related to Natick
Associates  (DeAngelis  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 March 19, 2002, principal and
accrued interest of $973,571 and $3,483,307, respectively, were due. On December
4,  2001,  the  Partnership  paid off,  at a  discount,  the  smaller of the two
purchase money notes. The discounted payoff resulted in extraordinary  gain from
extinguishment of debt of $116,659 for financial statement purposes in 2001, and
in cancellation  of indebtedness  income of $116,659 for federal tax purposes in
2001.  On March 19, 2002,  DeAngelis  Manor was sold.  Proceeds  received by the
Partnership  from the sale of the property  were used to pay off, at a discount,
the second purchase money note related to DeAngelis Manor, although the note has
not been cancelled  pending  payment of surplus cash through the date of closing
which has not been  released  by the state  regulatory  authority.  The sale and
discounted  payoff resulted in loss on disposition of investment in partnerships
of $28,669,  and in extraordinary  gain from  extinguishment of debt of $652,532
for financial  statement  purposes in 2002, and in  cancellation of indebtedness
income for  federal tax  purposes  of  $1,757,146  in 2002.  In March 2002,  the
Managing  General Partner was paid a disposition fee of $73,272  relating to the
sale.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment in DeAngelis Manor, the Partnership's basis in the Local Partnership,
along with net unamortized  acquisition fees and property purchase costs,  which
totaled $4,301,314, was reclassified to investment in partnerships held for sale
in the accompanying consolidated balance sheet at December 31, 2001.

                                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. As of May 10, 2002, principal and accrued
interest of $665,000 and $2,647,336,  respectively,  were due. 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.  The  Partnership  reached an  agreement  with the
noteholder in which the noteholder agreed to forbear from taking any action with
respect to the note through  January 3, 2002 in exchange for a payment which was
applied to the purchase  money note principal  balance.  As of May 10, 2002, the
purchase  money  noteholder  has not taken action to transfer the  Partnership's
interest in Glenridge Gardens.

                                       -9-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

         Due to the possible transfer of the Partnership's interest in Glenridge
Gardens 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, at March 31, 2002 and December 31, 2001, respectively, has been
reclassified  to investment in partnerships  held in escrow in the  accompanying
consolidated balance sheets.

                                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 nine months' notice. The local managing general partner and
the  noteholders  are jointly  exploring  various  options to refinance  the HUD
Section 236 interest rate subsidized mortgage loan related to this property with
Massachusetts Housing Finance Agency (MHFA). In connection with the extension of
the purchase money note, the Partnership and its affiliated  general partner did
not  retain  any  consent  rights  to  approve  a  sale,  refinancing  or  other
restructuring.  In March  2002,  a  contract  for the sale of the  property  was
signed.  There is no assurance that a refinancing of the mortgage loan or a sale
of the property will occur.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment  in  Highland  Village,   the   Partnership's   basis  in  the  Local
Partnership,  along with net unamortized  acquisition fees and property purchase
costs,  which  totaled  $526,550 at March 31,  2002,  has been  reclassified  to
investment  in  partnerships  held  for  sale in the  accompanying  consolidated
balance sheet at March 31, 2002.

                                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 an additional
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 a total  gain of
$7,895,814 for federal tax purposes in 2001.

                                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

                                      -10-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)



2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

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 U. S. Department of Housing &
Urban  Development  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.

                                   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 March 19, 2002,  principal and
accrued interest of $978,367 and $3,531,806, respectively, were due. On December
4,  2001,  the  Partnership  paid off,  at a  discount,  the  smaller of the two
purchase money notes. The discounted payoff resulted in extraordinary  gain from
extinguishment of debt of $141,152 for financial statement purposes in 2001, and
in cancellation  of indebtedness  income of $141,152 for federal tax purposes in
2001.  On March  19,  2002,  Matthew  XXV was  sold.  Proceeds  received  by the
Partnership  from the sale of the property  were used to pay off, at a discount,
the second purchase money note related to Matthew XXV, although the note has not
been cancelled pending payment of surplus cash through the date of closing which
has not been released by the state regulatory authority. The sale and discounted
payoff resulted in loss on disposition of investments in partnerships of $36,579
and in  extraordinary  gain  from  extinguishment  of  debt  of  $1,168,384  for
financial statement purposes in 2002, and in cancellation of indebtedness income
for federal tax  purposes of  $2,126,281  in 2002.  In March 2002,  the Managing
General Partner was paid a disposition fee of $49,743 relating to the sale.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment  in Matthew XXV, the  Partnership's  basis in the Local  Partnership,
along with net unamortized  acquisition fees and property purchase costs,  which
totaled $3,929,550, was reclassified to investment in partnerships held for sale
in the accompanying consolidated balance sheet at December 31, 2001.

                               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.  The
Partnership and the noteholder have signed a contract to sell the  Partnership's
interest in Pilgrim Tower East to the  noteholder,  during 2003, in exchange for
the principal and accrued  interest  outstanding  on the purchase money note and
two  payments  in 2002 on the  purchase  money  note,  one of which  was paid in
February 2002. There is no assurance that a sale of the  Partnership's  interest
in Pilgrim Tower East will occur.

                                      -11-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

     Due to the impending  sale of the  Partnership's  interest in Pilgrim Tower
East,  the  Partnership's  basis  in  the  Local  Partnership,  along  with  net
unamortized  acquisition fees and property purchase costs, which totaled $39,732
and $44,100,  at March 31, 2002 and December  31, 2001,  respectively,  has been
reclassified  to investment in  partnerships  held for sale in the  accompanying
consolidated balance sheets.

                               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. The
Partnership signed a contract with the noteholder which allows the noteholder to
purchase the property by November  30, 2002 in exchange  for the  principal  and
accrued  interest  outstanding  on the  purchase  money note and  assumption  or
prepayment by the noteholder of the mortgage note, the flexible subsidy note and
all related debt associated with the property in addition to a principal payment
applied to the note,  which was paid in January 2002. There is no assurance that
a sale of the property will occur.

     Due to the  impending  sale of the  property  related to the  Partnership's
investment  in  Pilgrim  Tower  North,  the  Partnership's  basis  in the  Local
Partnership,  along with net unamortized  acquisition fees and property purchase
costs, which totaled  $2,460,187 and $2,485,531,  at March 31, 2002 and December
31, 2001, respectively, has been reclassified to investment in partnerships held
for sale in the accompanying consolidated balance sheets.

                                 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. On July
23, 2001, the Partnership  paid off the purchase money notes at a discount.  The
discounted payoff resulted in extraordinary gain from  extinguishment of debt of
$2,141,273  for  financial  statement  purposes in 2001 and in  cancellation  of
indebtedness income of $2,141,273 for federal tax purposes in 2001.

                                 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  noteholders.
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 a total gain of $5,919,376 for federal
tax purposes in 2001.


                                      -12-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

                               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.  On May  24,  2001,  the
Partnership paid off the note at a discount.  The discounted  payoff resulted in
extraordinary  gain  from  extinguishment  of debt  of  $863,777  for  financial
statement  purposes  in 2001,  and in  cancellation  of  indebtedness  income of
$863,777 for federal tax purposes in 2001.

                                   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  aggregate  principal  and accrued
interest of $920,000 and $1,788,829, respectively. As of May 10, 2002, aggregate
principal and accrued  interest of $920,000 and $2,114,737,  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 10, 2002. 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
a future date to be negotiated.  There is no assurance that any settlement  will
be finalized.

     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,  at March 31, 2002 and  December  31,  2001,  have been
reclassified  to investment in partnerships  held in escrow in the  accompanying
consolidated balance sheets.

                                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 10, 2002,  aggregate  principal and accrued interest of
$485,000 and $3,021,602, 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.  The  Partnership  offered  to tender its
interests in Wellington Woods, but,  subsequently,  the plaintiff and the second
purchase money

                                      -13-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

noteholder  filed an amended  complaint.  Both  parties  have filed  motions for
summary  judgment.  In the meantime,  discovery is underway.  The Partnership is
unable to predict the outcome of the legal proceedings.

                                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 10, 2002, principal and accrued
interest of $840,000 and $1,916,066, 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 10, 2002.  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 are not repaid by a future
date to be  negotiated.  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, at March 31, 2002 and December 31, 2001, have been
reclassified  to investment in partnerships  held in escrow in the  accompanying
balance sheets.

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

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

     In  connection  with the  refinancing  of the mortgage  loan secured by the
property  owned by Crescent  Gardens in August 2001,  the  Partnership  advanced
$9,257 for closing  costs.  Such amount will be reimbursed  to the  Partnership,
with interest,  over a seven year period. For financial reporting purposes, this
advance has been reduced to zero by the Partnership as a result of losses at the
Local Partnership level.

                               Lakes of Northdale
                               ------------------

     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, 2002 and December  31, 2001.  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.

                                      -14-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

c.   Property matters
     ----------------
                                 DeAngelis Manor
                                 ---------------

     On March 19,  2002,  DeAngelis  Manor was sold.  See Note 2.a.  hereof  for
additional information concerning the sale.

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

     In March 2002, a contract for the sale of the Highland Village property was
signed. See note 2.a. hereof for further information concerning the sale.

                               Lakes of Northdale
                               ------------------

     On March  19,  2002,  a  contract  for the sale of the  Lakes of  Northdale
property to an unrelated  third party was signed.  Due to the impending  sale of
the property related to the Partnership's  investment in Lakes of Northdale, the
Partnership's  basis  in the  Local  Partnership,  along  with  net  unamortized
acquisition fees and property purchase costs, which totaled $80,272 at March 31,
2002, has been  reclassified to investment in partnerships  held for sale in the
accompanying consolidated balance sheet at March 31, 2002.

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

     On March 19, 2002 Matthew XXV was sold. See Note 2.a. hereof for additional
information concerning the sale.

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

     In February 2002, a contract for the sale of the Partnership's  interest in
Pilgrim Tower East was signed.  See Note 2.a. hereof for additional  information
concerning the sale.

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

     In January 2002, a contract for the sale of Pilgrim Tower North was signed.
See Note 2.a. hereof for additional information concerning the sale.

                                      -15-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


2.   INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued
     -------------------------------------------

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

     Combined  statements of operations for the 27 and 30 Local  Partnerships in
which the Partnership was invested as of March 31, 2002 and 2001,  respectively,
follow. The combined statements have been compiled from information  supplied by
the management agents of the projects and are unaudited. The combined statements
of operations for the three months ended March 31, 2002, include information for
two Local Partnerships through the date of sale.


                        COMBINED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                  For the three months ended
                                                           March 31,
                                                 -----------------------------
                                                    2002               2001
                                                 ----------         ----------

Revenue:
  Rental                                         $7,746,814         $7,741,323
  Other, principally interest                       562,564            589,313
                                                 ----------         ----------

    Total revenue                                 8,309,378          8,330,636
                                                 ----------         ----------


Expenses:
  Operating and other                             5,264,261          5,096,234
  Interest                                        1,207,648          1,294,029
  Depreciation and amortization                   1,585,199          1,575,684
                                                 ----------         ----------

    Total expenses                                8,057,108          7,965,947
                                                 ----------         ----------

Net income                                       $  252,270         $  364,689
                                                 ==========         ==========


     As of March 31, 2002 and 2001, the Partnership's share of cumulative losses
to  date  for 12 and 10 of  the  27  and 30  Local  Partnerships,  respectively,
exceeded the amount of the  Partnership's  investments  in and advances to those
Local  Partnerships  by  $13,370,311  and  $12,992,074,   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.

                                      -16-

<PAGE>
                 CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 2002 and 2001

                                   (Unaudited)


3.   RELATED PARTY TRANSACTIONS
     --------------------------

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $95,556 and
$70,468 for the three month periods ended March 31, 2002 and 2001, 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.

     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, 2002 and 2001.

     The Managing General Partner and/or its affiliates may receive a fee of not
more than two percent of the sales price of an investment in a Local Partnership
or the property it owns,  payable under certain  conditions  upon the sale of an
investment in a Local  Partnership  or the property it owns.  The payment of the
fee is subject to certain  restrictions,  including the achievement of a certain
level of sales  proceeds and making  certain  minimum  distributions  to limited
partners.  In January 2001, the Managing  General Partner was paid a disposition
fee of $186,682 relating to the sale of Wollaston Manor on December 28, 2000. In
March 2002,  the Managing  General  Partner was paid  disposition  fees totaling
$123,015  relating to the sales of DeAngelis  Manor and Matthew XXV on March 19,
2002.




                                      # # #

                                      -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 up to one year.  Expiring  Section 8 HAP  contracts  with rents that
exceed  100% of fair market  rents  could be renewed for up to one year,  but at
rents  reduced  to 100% of fair  market  rents  (Mark-to-Market).  All  expiring
Section 8 HAP  contracts  with rents  exceeding  comparable  market  rents,  and
properties  with mortgage  loans insured by the Federal  Housing  Administration
(FHA), became subject to the Mark-to-Market legislation.

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

                                      -18-

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


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

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

     Glenridge  Development  Company  (Glenridge  Gardens),  has a Section 8 HAP
contract  which,  as extended,  expires in May 2002.  The Section 8 HAP contract
covers 20% of the apartment units in Glenridge Gardens

     As of March 31, 2002, the carrying amount of the Partnership's  investments
in and advances to Local  Partnerships with Section 8 HAP contracts  expiring in
the next 12 months was $0.

     The Managing  General  Partner  continues to seek  strategies  to deal with
affordable  housing policy.  Where  opportunities  exist,  the Managing  General
Partner will continue to work with the Local  Partnerships to develop strategies
that make economic sense.

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

     The Partnership's liquidity, with unrestricted cash resources of $5,692,382
as of March 31, 2002, along with anticipated  future cash distributions from the
Local  Partnerships,  is  expected  to be  adequate  to  meet  its  current  and
anticipated  operating  cash needs.  As of May 10, 2002,  there were no material
commitments for capital expenditures.

     The  Partnership's  obligations  with respect to its  investments  in Local
Partnerships,  in the  form  of  nonrecourse  purchase  money  notes  having  an
aggregate  principal  balance of $25,580,081 plus aggregate  accrued interest of
$90,275,307  as of March 31, 2002, 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 through May 10, 2002.

                                              Original         Extended
Property                   Principal          Maturity         Maturity
--------                  ------------        --------         --------
Jewish Federation         $ 1,350,000         10/31/99 (2)     10/31/04
Highland Village            1,100,000         10/31/99         10/31/04
Canonsburg House (1)        1,440,000         12/01/99         01/03/03
Char House (1)              1,430,000         12/01/99         01/03/03
Liberty Tower (1)           1,340,000         12/01/99         01/03/03
Pilgrim Tower East          1,550,000         12/01/99         11/30/03
Pilgrim Tower North         2,065,000         04/30/00         11/30/02


(1)  Other purchase money notes  relating to these  properties  were paid off in
     October 2001.
(2)  There were interim extensions to April 30, 2000 and April 30, 2001.


     The purchase money notes related to the following  properties  have matured
and have not been paid or extended as of May 10, 2002.

Property                   Principal          Maturity
--------                  ----------          --------
Crescent Gardens          $  434,000          07/31/99
Valley View                  920,000          09/01/99 (1)
Westport Village             840,000          09/01/99 (1)
Wellington Woods             485,000          12/01/99
Glenridge Gardens            665,000          01/01/02 (2)

(1)  Extended in accordance with the forbearance agreement.
(2)  Original maturity was August 1, 1999.


     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 2001 and through May 10, 2002.

Property                   Principal              Date           Disposition
--------                  ----------          ------------       -----------
Chippewa County           $  860,000          January 2001       Paid Off
Hometown Village           1,495,000          January 2001       Transferred
Scoville Center            1,400,000          January 2001       Transferred
Cottonwood Park              975,000          May 2001           Paid Off
Tradewinds Terrace           925,000          May 2001           Paid Off
Riverview Manor              740,000          July 2001          Paid Off
Canonsburg House (2)         100,000          October 2001       Paid Off
Char House (2)               100,000          October 2001       Paid Off
Liberty Tower (2)            100,000          October 2001       Paid Off
DeAngelis Manor              973,571 (1)      March 2002         Paid Off
Matthew XXV                  978,367 (1)      March 2002         Paid Off

(1)  Remaining principal after a partial payoff.
(2)  Other purchase money notes  relating to these  properties  were extended to
     mature in January 2003.


     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 noteholder may have the
right  to  foreclose  on  the  Partnership's   interest  in  the  related  Local
Partnership.

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

     The following  chart presents  information  related to purchase money notes
which have  matured,  have been  extended to mature,  or are scheduled to mature
through  March 31, 2003,  and which remain  unpaid or  unextended  as of May 10,
2002.  Excluded from the following  chart are purchase money notes which matured
through March 31, 2002, and which have been paid off, cancelled,  or extended on
or before May 10, 2002.

<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
   Maturity       Partnerships    of Total      31, 2002     of Total     31, 2002     of Total      March 31, 2002       of Total
--------------    ------------   ----------    -----------  ---------    ----------   ----------   ------------------    ----------
<S>               <C>            <C>           <S>          <C>          <C>          <C>          <C>                   <C>
3rd Quarter 1999        3            16%       $ 2,194,000        9%     $ 5,249,548       6%         $        --             0%
4th Quarter 1999        1             6%           485,000        2%       2,978,761       3%             607,868             3%
1st Quarter 2002        1             6%           665,000        3%       2,616,414       3%                  --             0%
3rd Quarter 2002        1             6%         1,500,000        6%       2,568,187       3%                  --             0%
4th Quarter 2002        1             6%         2,065,000        8%      16,502,117      18%           2,403,018            13%
1st Quarter 2003        3            16%         4,210,000       16%      15,931,313      18%           2,858,134            16%
                     ----          ----        -----------     ----      -----------    ----          -----------          ----
Total through
 03/31/2003            10            56%       $11,119,000       44%     $45,846,340      51%         $ 5,869,020            32%
                     ====          ====        ===========     ====      ===========    ====          ===========          ====
Total, Local
  Partnerships         18           100%       $25,580,081      100%     $90,275,307     100%         $17,878,497 (1)       100%
                     ====          ====        ===========     ====      ===========    ====          ===========          ====
</TABLE>


(1)  Includes  $2,902,877  and  $2,432,730  for  the  partnership   reported  as
     investment in  partnerships  held for sale and  $2,858,134  and  $2,871,895
     reported as investment in partnerships  held in escrow on the  consolidated
     balance sheets at March 31, 2002 and December 31, 2001, respectively.

     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

                                      -21-

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

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  38.6%.  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 27 Local  Partnerships  in which the  Partnership is invested as of March
31, 2002, the 10 Local  Partnerships with associated  purchase money notes which
mature  through  March 31, 2003 and which remain  unpaid or unextended as of May
10, 2002,  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, 2001                  15%                           $0
 December 31, 2000                   8%                           $0

     The  Managing  General  Partner  continues  to  address  the  maturity  and
impending  maturity  of its debt  obligations  and to seek  solutions  that 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, 2002 and 2001,  net cash provided by
investing activities,  including the receipt of distributions from partnerships,
was adequate to support operating cash  requirements.  Cash and cash equivalents
increased  during the three  month  period  ended  March 31,  2002,  as net cash
provided by investing  activities exceeded net cash used in operating activities
and financing activities.

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

2002 Versus 2001
----------------

     The Partnership  recognized net loss for the three month period ended March
31,  2002,  as  compared  to net  income for the  corresponding  period in 2001,
primarily due to a decrease in extraordinary  gain from  extinguishment of debt.
Such gain was  $9,134,778  in the 2001 period,  but only  $1,820,916 in the 2002
period.  Contributing  to net loss were a loss on  disposition of investments in
partnerships in 2002, a decrease in share of income from partnerships  primarily
due to higher operating expenses at one property, a decrease in interest revenue
due to lower cash and cash equivalent balances and lower interest rates in 2002,
an increase in general and administrative  expenses related to higher reimbursed
payroll costs, and an increase in professional fees related to attorney fees for
the Natick Associates  (DeAngelis Manor) and Diakonia  Associates  (Matthew XXV)
purchase money note settlement. Partially offsetting net loss were a decrease in
interest  expense due to a lower  purchase  money note balance and a decrease in
amortization of deferred costs due to fewer investments in partnerships in 2002.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnerships. As a
result, the Partnership's  share of income from partnerships for the three month
periods  ended March 31, 2002 and 2001 did not  include  losses of $224,657  and
$183,704, respectively.

                                      -22-

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


     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 partner interest (Units) in the Partnership, although various
informal  secondary market services exist. Due to the limited markets,  however,
investors may be unable to sell or otherwise dispose of their Units.

                                  Tender offers
                                  -------------

     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 an unspecified  number of the 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.

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

     On November 29,  2001,  Lexington  initiated a  registered  tender offer to
purchase up to 14,700 of the outstanding  Units in the Partnership at a price of
$40 per Unit; the offer expired December 29, 2001.

     In response to the  Lexington  tender  offer,  on December  12,  2001,  the
Managing  General Partner filed a Schedule  14D-9. In that filing,  the Managing
General  Partner  recommended  that Limited  Partners reject the Lexington offer
because it viewed the offer price as inadequate.

                                      -23-

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

     During 2001, a number of investors  sold their Units in the  Partnership to
other investors as a result of the  unregistered  tender offers 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, if so, the
income and losses from the  Partnership  would no longer be considered a passive
activity.  From January 1, 2001, through July 16, 2001, the Partnership received
sale  transfer  requests  for  approximately  4.9%  of  the  outstanding  Units.
Accordingly,  to remain within the five percent safe harbor,  effective July 16,
2001,  the Managing  General  Partner  halted  recognition of any transfers that
would exceed the safe harbor  limit  through  December  31,  2001.  As a result,
transfers  of  Units  due to  sales  transactions  were  not  recognized  by the
Partnership  between July 17, 2001 and  December  31, 2001.  The halt was lifted
effective  January 1, 2002.  For the calendar  year 2002 to May 10, 2002,  Units
transferred have not exceeded 4.9% of the total  outstanding  Units,  therefore,
the Partnership has not halted recognition of transfers.

                                Cash distribution
                                -----------------

     On April 27, 2001, the  Partnership  made a cash  distribution  of $733,670
($10.00 per Unit) to Additional  Limited  Partners who were 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, 2002.

     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 10, 2002                    by:  /s/ Michael J. Tuszka
---------------                      -------------------------------------------
DATE                                 Michael J. Tuszka
                                       Vice President
                                       and Chief Accounting Officer
                                       (Principal Financial Officer
                                       and Principal Accounting Officer)

                                      -25-