When 2nd Lt. Lance Konzen got his first military assignment, the Air Force recommended he and his wife Megan Konzen move into housing right on his base at Laughlin Air Force Base in Del Rio, Texas, to help them adjust to military life.

But the Konzens didn't know their new home had mold growing in the vents, which gave Megan respiratory problems and led to several emergency room visits, she said. The family said the private company managing their home didn't provide preventative maintenance or clean the home thoroughly once mold was discovered.

The Konzens are one of several families highlighted in a report from the Military Family Advisory Network published Wednesday, which found that military families living in on-base housing face dangerous conditions including mold, vermin and poor water quality.

The military uses private companies to provide and maintain on-base housing for families, but the report shows that substandard living conditions are widespread.

The report comes on the heels of an investigation by Reuters into privatized military housing that it published in November, which estimated the companies would receive about $3.9 billion through military rent allowances in 2018.

The Department of Defense privatized its military housing in 1996 to improve housing conditions. Currently, 99 percent of on-base military housing is privatized, MFAN's executive director, Shannon Razsadin, told CNBC.

Yet, more than half of the 14,000-plus respondents to the MFAN survey who have lived in privatized military housing within the past three years, rated their satisfaction with housing management as "negative" or "very negative."

Just 16 percent rated their satisfaction as "positive" or "very positive."

The MFAN report, which summarized the survey responses, found that families' complaints were ignored and bad conditions persisted. Even when work was completed, it was "shoddy," according to the report.

"We heard from multiple families that their concerns were downplayed," the MFAN report said. "Many were told that mold was dirt or that nothing could be done about visibly growing mold on windowsills, walls, and ceilings."