Electronic signatures are nothing new. You’ve probably signed all sorts of documents electronically, like a receipt, a job application, or even your taxes. However, when it comes to the affordable housing industry, e-signed documents are still a foreign concept.
We wanted to examine the impact e-signatures could have on affordable. So, ResMan’s SVP of Marketing, Dennis Behrman, sat down with affordable housing expert Janel Ganim. Ganim, along with her colleagues in the industry, submitted a draft notice – a type of guide – to the Department of Housing and Urban Development (HUD) to permit e-signatures in affordable housing.
Read the interview below:
Dennis Berhman: What’s the history behind electronic signatures?
Janel Ganim: The E-Sign Act was first signed into law on June 30, 2000. It said that e-signatures are legally enforceable. The other great thing, federal agencies have obligations under the Government Paperwork Elimination Act to make it easier for residents to interact with them. This means allowing acceptance of electronic records to be submitted by tenants or owner/agents who are working with government agencies.
DB: Who in multifamily currently uses electronic signatures?
JG: Other multifamily industries are using electronic signatures for their online application and lease execution. That’s not allowed for HUD or tax credit properties. No affordable housing agencies can make use of the technology and tools that are available now. Furthermore, HUD has audit requirements that state properties must keep paper-signed copies of forms.
DB: Why did you and your colleagues create this draft notice?
JG: One of the things that really pushed this effort forward was all the hurricanes and flooding that happened at the end of 2017. There were properties that lost all their paper files. So when it came time to audit those properties, they literally had nothing on-site.
DB: What subsidy types are impacted by your draft notice?
JG: All the HUD multifamily programs, including the new RAD program, as well as public housing. It’s important to note that this draft notice doesn’t apply to tax credit properties or rural housing because HUD can govern its own properties, but the IRS governs the tax credit side. What we’re hoping is that once HUD gets on board, the others will follow suit.
DB: If these other legal entities are accepting electronic signatures, what’s taking the affordable industry so long?
JG: The affordable sector has been reluctant because it hasn’t understood the legal implications and the security parameters that are involved to implement a policy like this. My colleagues and I have been working for the past several years to educate HUD on what the technical requirements are for e-signatures and how it could put policy in place to implement them.
DB: What type of security concerns are there with e-signatures?
JG: The biggest thing is data encryption and storing documents. With electronic signatures, there are five technical requirements that must be met for them to be legally enforceable. That is outlined in the draft notice we created. Most software providers, if they’re offering an online application or lease execution package, they already meet those standards. But anyone that is new to the game, like if someone wants to suddenly add this offering for their clients, they’d have to make sure that they are following those technical requirements. On the storage side, they’ve got to use a National Institute of Standards and Technology (NIST)-compliant encryption system to make sure that that data is safe.
DB: What about guidelines around electronic storage of documents?
JG: HUD was careful to be technology agnostic. They can’t force a certain method or a certain tool. What they did in the notice is give some guidance on some different transmission methods including Dropbox or Google Drive. They also wanted to leave it open so that any future technology that follows the NIST security encryption is an acceptable transmission method.
DB: Will there be any additional security guidelines for software providers in terms of document storage?
JG: There are already so many providers that already have a document management system. It’s just a matter of flipping the switch and allowing that for HUD properties.
DB: Will this draft notice eliminate the use of paper documentation?
JG: The notice is going to allow sites to start using electronic signature and electronic storage, but they can’t require it. Not all tenants are comfortable with an electronic process.
<< It was just getting good, we know. ResMan’s conversation with affordable expert Janel Ganim continues next week. Subscribe to our blog to stay tuned. >>
About Janel Ganim
Janel Ganim is the Vice President of Compliance at RightSource. She has worked in the affordable housing industry for more than 20 years. She is actively involved in multiple affordable housing organizations, including serving as vice chair of the NAHMA Affiliates Committee and participating in HUD working groups to create TRACS industry specifications.
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