Affordable Housing & Compliance

Electronic Signatures Are the Future of Affordable Housing: Part 2

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Electronic signatures in affordable housing have the potential to revolutionize the way property managers work and how tenants interact with their communities. The issue: the sector has been slow to seize the opportunity.

That’s why RightSource’s Vice President of Compliance Janel Ganim and her colleagues submitted a draft notice to the Department of Housing and Urban Development (HUD) that recommends a policy on how to implement them industry-wide.

Read the conversation between ResMan’s SVP of Marketing and Ganim below:

Dennis Behrman: How do you think the industry will take to adopting e-signatures?

Janel Ganim: You have so many portfolios that have a mix of affordable and conventional. They are already taking advantage of e-signatures on their conventional properties and they want to implement them on their affordable properties too. There will definitely be adopters as soon as this notice is published.

DB: What’s the process to get the draft notice published?

JG: It’s going through internal review at HUD. It’s almost ready to go into departmental clearance. Once that happens, it’ll be posted for public comment. There is usually a 30-day review period. HUD will take those comments review them and respond and then make any tweaks to the notice as they see fit. A part of why it’s taking this notice a little longer to get published is because it originally applied to the multifamily side of HUD, but HUD decided to go ahead and include the Office of Public and Indian Housing as well.

DB: How will e-signatures impact workflows?

JG: I think it should make the workflow much more seamless. From start to finish. From the guest card all the way through the lease execution. This draft notice would truly let on-site staff focus on other ways to interact with their residents as opposed to just sitting down and sorting through so much paper.

DB: Would this notice make it easier for someone to approve certifications like a third party or a corporate office?

JG: There are tools right now that allow you to scan files so that someone else can look at them and improve them before a certification is completed. If you’re going to implement an electronic signature or electronic storage policy – or ideally both – you are already going to be automating the certification workflow. The data is going to be there. It’s just a matter of allowing access for someone then putting stops in the process to allow a corporate office or a third party to go in an do an audit of compliance for those certifications.

DB: What are some other benefits of e-signatures?

JG: What you’ll start to see is more integration of a document management solution that is part of the certification workflow. One of the biggest things it’ll change is when it’s review time, properties will be able to give auditors read-only access to these files that are stored. This means a lot if the file audit can happen off-site. If the auditor can work remotely, it saves costs for the contract administrators and doesn’t disrupt the on-site staff’s day.

DB: Will the IRS accept e-signatures nationwide or will it be governed on a state-by-state basis by the FHA?

JG: The states rule in the tax credit world. They are the ones distributing the funds and they get to make the rules. I think you’ll see on a state-by-state basis as to what they will and won’t accept.

DB: What happens if management changes on the property and all the files have been stored electronically?

JG: Owner/agents are already required to provide copies of documentation that they have and to share that information with the new management coming in. Now, they have the option on the method to deliver that information, whether it’s paper files or electronically.

DB: How can affordable professionals get involved in this push for electronic signatures?

JG: If you’re interested in lobbying for the permission of e-signatures in affordable housing, reach out to your representatives in Congress or your state housing finance agencies. The more people you can get on your side the better chance you have of our industry seeing a successful acceptance of this overall.

DB: What next?

JG: HUD gave an update that the notice should be released for public comment sometime around late March. The comment period will last two weeks. At that point, comments will be reviewed, and the notice may or may not be updated. I do anticipate it will be released as a formal notice around the same time.

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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