Whether you’re managing HUD Section 8 (Project Based), HUD Vouchers, or Low Income Housing Tax Credits (LIHTC), or many other state and local programs, the nuances of each program can be difficult to navigate. For example, with Project Based Section 8 Housing, you’re responsible for both initial income certification along with an annual recertification and calculating the rent amount.

Additionally, you’re required to have at least three potential residents certified and ready to move in at any moment, but those income certifications only last 120 days. Operators are required to conduct periodic assessments which require them to reach out to prospects on the waiting list at least twice a year to verify their information and determine if they are still interested in living in the project.

Managing the waiting list and having those individuals continually certified so you can turnover units as quickly as possible when one comes available can be time consuming and a strain on resources. On the flip side, if you are managing a community that’s 100% LIHTC, you only have to do an initial income certification, which states or local housing authorities may override, and if you have a mixed-use property, annual income certification may still be required, depending on which state you are in. Are you confused yet?

But that’s just the tip of the iceberg. You’re also tasked with staying on top of the regulatory and compliance requirements (i.e. making sure units meet regulatory requirements, etc.) for the alphabet soup of programs and processes you’re responsible for managing, including LIHTC, HUD, HAP, TRACS, to name a few. Without the proper tools in place, this can be a full-time job, or more, just to manage income certification and recertification. And these processes become even more complicated when you’re managing market rate and affordable units in the same property.

And income certification is just one piece of the puzzle. Another area that can be confusing is accounting for payments, determining whether they’re coming from the government or from the resident, and ensuring everything is reconciled correctly on a month-to-month basis. For example, if you are taking payments from someone renting a Project Based Section 8 contract, you have to keep track of both the rent paid by the resident and reconcile that with subsidies paid by the government, which come in bulk for your entire property and have to be redistributed to each unit. Voucher programs also require the tracking and receipt of two payments per unit—the resident portion and the voucher.

Staying compliant

Even when you have the best intentions and do everything in your power to achieve compliance, it’s possible for you to become non-compliant when unexpected changes occur to resident income or household composition. Regardless of how that happens you have to face the consequences, which could have a major impact on your business financially. That means if you are managing a LIHTC property that comes out of compliance, the tax credits received in the past can become recapturable as taxable income to the investors and syndicators who put the deal in place originally.

When one of your residents exceeds the income limits for the affordable unit they are occupying, properties can take advantage of an IRS rule known as the next available unit, which will require you to “rent the next available market-rate or rent-restricted unit of comparable or smaller size in the same building to a qualified, low-income applicant.”

While the HUD and other affordable housing programs have been in place for decades, technology to support the management of portfolios that contain both conventional and affordable properties from one platform have been slow to be created. What that means is having to learn and manage multiple solutions to manage the day-to-day of each different property type, which can be confusing and cause site staff major headaches. In today’s day and age, employees don’t want the complication of using multiple solutions, especially if they are being used to manage the same processes.

A better way exists

Many of these factors may deter some properties from taking on the responsibility of managing affordable housing communities, but recent advances in technology and changes to HUD that are bringing Affordable Housing into the 21st century (i.e. allowing for online document signatures, etc.) are enabling businesses to more efficiently manage both affordable and conventional units across their entire portfolio together. Entrata has worked closely with some of the top names in affordable housing to create a solution that solves many of the problems outlined above with the goal to make the management of affordable properties more efficient and accessible to more operators.

Entrata® Affordable simplifies the process of managing multiple affordable programs from one dashboard. No more toggling between multiple applications or having to remember multiple passwords just to do your job. Everything can be handled from one place.

Entrata’s solution enables your accounting team to stay on top of the different methods of payments for each program and automating reconciliation in your accounting ledger which had previously proven to be complex and time consuming, but accounting is just one piece of the puzzle. Managing the application process, income certification (and recertification), and other steps in the approval process is a constant that’s never going to go away because as regulations and income limits change, it could mean residents are no-longer qualified for the unit they’re living in. Keeping track of that could be a full time job in and of itself, but with the right technology in place, these processes are streamlined and handled automatically, which is something Entrata Affordable makes possible.

Learn more

To learn more about how technology is vastly improving the management of properties with affordable housing units, keep an eye out for the next blog post in this series, or download our latest ebook, Affordable Housing Best Practices