1. (a) Investments Authorized.— The Secretary concerned may make investments in an eligible entity carrying out projects for the acquisition or construction of housing units suitable for use as military family housing or as military unaccompanied housing.
2. (b) Forms of Investment.— An investment under this section may take the form of an acquisition of a limited partnership interest by the United States, a purchase of stock or other equity instruments by the United States, a purchase of bonds or other debt instruments by the United States, or any combination of such forms of investment.

3. (c) Limitation on Value of Investment.—

   1. (1) The cash amount of an investment under this section in an eligible entity may not exceed an amount equal to 33⅓ percent ¹ of the capital cost (as determined by the Secretary concerned) of the project or projects that the eligible entity proposes to carry out under this section with the investment.
   2. (2) If the Secretary concerned conveys land or facilities to an eligible entity as all or part of an investment in the eligible entity under this section, the total value of the investment by the Secretary under this section may not exceed an amount equal to 45 percent ¹ of the capital cost (as determined by the Secretary) of the project or projects that the eligible entity proposes to carry out under this section with the investment.
   3. (3) In this subsection, the term “capital cost”, with respect to a project for the acquisition or construction of housing, means the total amount of the costs included in the basis of the housing for Federal income tax purposes.
4. (d) Collateral Incentive Agreements.— The Secretary concerned shall enter into collateral incentive agreements with eligible entities in which the Secretary makes an investment under this section to ensure that a suitable preference will be afforded members of the armed forces and their dependents in the lease or purchase, as the case may be, of a reasonable number of the housing units covered by the investment.

(Added Pub. L. 104–106, div. B, title XXVIII, § 2801(a)(1), Feb. 10, 1996, 110 Stat. 546; amended Pub. L. 105–85, div. B, title XXVIII, § 2805, Nov. 18, 1997, 111 Stat. 1991; Pub. L. 106–65, div. B, title XXVIII, § 2803(d), (h)(1), Oct. 5, 1999, 113 Stat. 849; Pub. L. 108–136, div. A, title X, § 1031(a)(50), Nov. 24, 2003, 117 Stat. 1602; Pub. L. 113–66, div. B, title XXVIII, § 2805, Dec. 26, 2013, 127 Stat. 1008.)

Editorial Notes

Amendments

2013—Subsec. (e). Pub. L. 113–66 struck out subsec. (e). Text read as follows: “Amounts in the Department of Defense Family Housing Improvement Fund or the Department of Defense Military Unaccompanied Housing Improvement Fund may be used to make a cash investment under this section in an eligible entity only after the end of the 30-day period beginning on the date the Secretary of Defense submits written notice of, and justification for, the investment to the appropriate committees of Congress or, if earlier, the end of the 14-day period beginning on the date on which a copy of the notice and justification is provided in an electronic medium pursuant to section 480 of this title.”

2003—Subsec. (e). Pub. L. 108–136 inserted before period at end “or, if earlier, the end of the 14-day period beginning on the date on which a copy of the notice and justification is provided in an electronic medium pursuant to section 480 of this title”.

1999—Pub. L. 106–65, § 2803(h)(1), struck out “in nongovernmental entities” after “Investments” in section catchline.

Subsec. (a). Pub. L. 106–65, § 2803(d)(1), substituted “an eligible entity” for “nongovernmental entities”.

Subsec. (c). Pub. L. 106–65, § 2803(d)(2), substituted “an eligible entity” for “a nongovernmental entity” in pars. (1) and (2) and “the eligible entity” for “the entity” wherever appearing in pars. (1) and (2).

Subsec. (d). Pub. L. 106–65, § 2803(d)(3), substituted “eligible” for “nongovernmental”.

Subsec. (e). Pub. L. 106–65, § 2803(d)(4), substituted “an eligible entity” for “a nongovernmental entity”.

1997—Subsec. (e). Pub. L. 105–85 added subsec. (e).

Statutory Notes and Related Subsidiaries

Temporary Increase in Percentage of Value of Authorized Investment in Certain Privatized Military Housing Projects

Pub. L. 119–21, title II, § 20001(b), July 4, 2025, 139 Stat. 112, provided that:

1. “(1) In general.— During the period beginning on the date of the enactment of this section [July 4, 2025] and ending on September 30, 2029, the Secretary concerned shall apply—

   1. “(A) paragraph (1) of subsection (c) of section 2875 of title 10, United States Code, by substituting ‘60 percent’ for ‘33 ⅓ percent’; and
   2. “(B) paragraph (2) of such subsection by substituting ‘60 percent’ for ‘45 percent’.
2. “(2) Secretary concerned defined.— In this subsection, the term ‘Secretary concerned’ has the meaning given such term in section 101 of title 10, United States Code.”

¹ See Temporary Increase in Percentage of Value of Authorized Investment in Certain Privatized Military Housing Projects note below.