By the mid-1990s, the condition of family housing at one U.S. military base had become such an embarrassment that a base engineer suggested that he was the biggest slumlord in his city. Aging and often poorly maintained housing stock was rampant at the nation's bases and installations and was becoming a major recruiting disincentive.

Lacking resources and management skills to quickly renovate or replace 300,000 units of family base housing, the U.S. Dept. of Defense decided to enlist the private sector as "partners." In 1996, Congress authorized DOD to obtain private-sector financing and expertise to improve housing. The Military Housing Privatization Initiative (MHIP) allowed the armed services to provide loan and rental guarantees, make direct loans, invest in companies or partnerships or convey or lease existing military property.