Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) methodology for determining whether build-to-lease and rental-guarantee housing projects are cost-effective when compared to traditional military housing, where the government builds and owns the housing project. GAO also determined the status of the 801 project, where the government leases a project from a private developer, and the 802 project, where the government guarantees up to 97-percent occupancy of privately owned rental housing. GAO found that: (1) the services have complied with the laws authorizing 801 and 802 projects; (2) it could not compare the quality of 801 and 802 housing projects with those built under traditional military construction due to the stage of the projects at the time of its review, the lack of comparable housing units, and the subjective nature of quality determinations; (3) DOD officials believe that the quality of 801 units would be equal to that of traditional military construction; however, 802 units would be adequate but not as good as 801 or traditional military housing units since less money is used to construct the 802 units; (4) although Congress received information showing that the 801 and 802 projects were less costly than the services' estimate, the information may not be an adequate basis for approving an 801 or 802 project, due to the uncertainty about the quality of leased housing and the maximum allowable cost that DOD sets to ensure that all successful 801 and 802 bids are less costly than the military construction alternative; and (5) more information is needed to determine whether leasing is more cost-effective than traditional military construction methods.