Last modified on January 5th, 2024
By Megan Eales Monroe
Affordable housing property management already comes with its own unique set of challenges. But now, property management companies need to prepare for something entirely new: Being fully compliant with the Housing Opportunity Through Modernization Act of 2016 (HOTMA) by January 1, 2025.
The good news is that HOTMA was designed to help simplify and streamline the verification processes used in federal housing programs. However, in order to do so, affordable housing property management teams and organizations may find that big operational adjustments and shifts will be needed, in order to meet the HOTMA deadline and stay compliant.
In this episode of The Top Floor podcast, two industry experts offer their insights and advice on how property management organizations can guide their teams and residents through some of the most significant changes to HUD’s occupancy requirements in the last 10 years.
Joining the podcast are Jenny DeSilva, the President and CEO of DeSilva Housing Group and Colleen Winship, AppFolio’s Affordable Housing Program Manager. Together, they break down the top changes property management teams need to know about, offer tips on how to prepare for HOTMA compliance now, and discuss the best ways to guide property management teams and residents through a new set of verification processes.
Meet Our Guests:
Jenny DeSilva is the President and CEO of DeSilva Housing Group and has 25 years of experience in affordable housing. She is a recognized industry compliance expert with extensive consulting and training knowledge in HUD’s Multifamily Housing programs. When not training, consulting with, or drafting policies for clients, Ms. DeSilva provides quality assurance and technical expertise to vendors offering TRACS compliance software, and serves as a HUD technical assistance subcontractor. Jenny DeSilva is a Certified Occupancy Specialist, Tax Credit Specialist and Certified Housing Manager.
Colleen Winship is AppFolio’s Affordable Housing Program Manager. She joined AppFolio in 2022 and brings over eight years of experience in multifamily property management. During her tenure, Colleen oversaw multiple facets of real estate, specializing in affordable housing. She is a Certified Occupancy Specialist and Blended Occupancy Specialist.
Megan: In 2016, the Housing Opportunity Through Modernization Act, also known as HOTMA, was signed into law. Nearly seven years later, in January 2023, HUD published its Final Rule. The Final Rule introduced a significant and comprehensive set of changes to HUD’s occupancy requirements. While the Final Rule is effective from January 1st, 2024, HUD recently gave notice that multifamily program owners and agents have until January 1st, 2025 to reach full compliance.
Although HUD’s goal with HOTMA is to streamline verification processes used in federal housing programs, with so much change happening at one time, there’s still going to be quite an adjustment period for affordable housing management teams.
And while HUD’s final HOTMA compliance deadline seems like a ways away, that implementation deadline is actually much closer than it seems. That’s because there are several key steps affordable housing management companies need to take long before that final deadline takes effect. Things like getting teams trained, communicating updates to residents, and shifting day-to-day operations to meet new regulatory changes.
To help property management companies proactively prepare for full HOTMA compliance, we’ll hear from two affordable housing industry experts on today’s episode of The Top Floor podcast. Our guests for today are:
- Jenny DeSilva, President and CEO of DeSilva Housing Group
- And Colleen Winship, AppFolio’s Affordable Housing Program Manager
Together, they’ll offer insights and advice on how property management organizations can guide their teams and residents through some of the most significant and comprehensive changes to HUD’s occupancy requirements in the last ten years.
Colleen Winship: Thank you, everyone, for joining the podcast today. I’m super excited to introduce our guest today. Her name is Jenny DeSilva. Luckily for me and for AppFolio, we have been working with Jenny for quite a while now. We love to lean on industry experts, especially in the affordable housing world. So Jenny DeSilva has been a key player in some of our product decision-making skills. I personally lean on her a lot.
I’ll introduce myself first very quickly. My name is Colleen Winship. I’m the Program Manager for our affordable housing development team here at AppFolio. We are concentrating on creating a great product that helps support affordable housing programs, both HUD and LIHTC. And we are super excited to talk to Jenny today. As you probably know, the topic today is HOTMA, but we’ll get more into that. Before we really get started, Jenny, can you just do a quick intro, tell us a little bit about yourself and your company.
Jenny DeSilva: Great, thank you Colleen. My name is Jenny DeSilva. I’m the President, CEO of DeSilva Housing Group. We are a consulting training and policy development firm that caters to the HUD multifamily industry. So all HUD multifamily programs are our wheelhouse.
I’ve been in the industry for almost 25 years. Started out working for a performance-based contract administrator for several years under directorships, overseeing voucher processing and track submissions and management and occupancy reviews before I ultimately found my true passion, which is working with owners and agents in the affordable housing industry. So we offer live and webinar training, policy development, and as Colleen mentioned, we work very closely with affordable software vendors, making sure that their product works and provides the compliance aspects and the efficiencies necessary for their users to be ready for a management and occupancy review and ultimately get paid their subsidy. So I love what I do and I’m happy to talk HOTMA with you guys today.
Colleen Winship: Can’t wait. Yeah, I’m really excited because I’m almost at that 10-year mark where I can say I’ve been in the industry for 10 years, but I think as we all know, in the affordable housing world, that’s nothing compared to other folks. Jenny, would you mind telling us how many years of experience you have with your extensive background?
Jenny DeSilva: So I have been in the industry for about 24 years right now. I like to say I started when I was three so that I don’t completely date myself here. But yeah, the industry has changed a lot in those 24 years. It’s an exciting time to be a part of affordable housing and there’s a lot of change on the horizon that we have to talk about today.
Colleen Winship: Yeah, I agree. I don’t know if it’s just because totally immersed in affordable housing, but it feels like it’s in a lot of wider conversations. It is still very niche, but I think that a lot of people are more aware of the need of affordable housing and that’s exciting to us in the industry because we’ve always known there’s a need and now we can finally hopefully see more units on the horizon that will target those who need that lower rent.
Jenny DeSilva: I think, as an industry, we’ve combated this stereotype or this perception that affordable housing is an eyesore of the community or not something anyone wants to live by, and that’s not the case anymore. With the housing crisis the way it is, we’re seeing beautiful, layered properties being built, new construction in some of the best areas for housing development. Let’s face it. We’ve got to preserve the housing stock that we all are going to need nationally to make sure that those that are not as fortunate or need the assistance have that available housing as a stepping stone for themselves. So it is a true passion.
I think a lot of people that work in the affordable housing industry do it because they love what they do, and they see the benefit of being able to provide a service to individuals in our community. Everybody deserves a safe place to live. And as taxpayers, as stewards of HUDs funds, owners and agents in the affordable housing industry really have an opportunity to change that perspective that people who are not in the industry might have of low-income housing. And I’m excited to be a part of managing those optics.
Colleen Winship: Yeah, absolutely. I think one of the things I’m most excited that I’m seeing is lowering the barriers for owners and developers to get into affordable housing. Not making it seem so scary working on the different zoning requirements, all sorts of different aspects, but that will then lead to lowering the barriers for the potential residents to be in these units. So it’s an exciting change that I think we’re seeing on the horizon.
Jenny DeSilva: Absolutely, absolutely.
Colleen Winship: So our conversation today is going to be one of…I know it’s one of Jenny’s favorites, it’s also one of mine. So we’re going to focus on the upcoming HOTMA changes that we are seeing coming down from HUD and from other leaders on a federal level. However, just to make sure that all of our listeners are on the same page, can you give us just a brief overview of what HOTMA is and why it’s such a significant piece of legislation?
Jenny DeSilva: Sure. So HOTMA actually stands for the Housing Opportunities Through the Modernization Act, and it was a very large portion of a bill that was passed in 2016. The overall objective of HOTMA is to provide some administrative burden relief for housing operators in the tasks that they have on an annual basis to recertify their residents. So administrative burden relief is the first objective. The second of which was making some minor adjustments for eligibility determinations to make sure that we’re serving the correct segment of our population that needs the housing assistance. So that at a very, very high level is what the objective for HOTMA was as a law.
Every federal agency then had to take a look at HOTMA and decide how would that impact their programs, and HUD was one of those federal agencies. So both public housing tax credit and HUD multifamily programs as well as USDA were then tasked with evaluating what this law said, how it impacted program compliance for their program participants, and then ultimately they had to publish guidance for those owners and agents to modify their entire way of doing business on the leasing and occupancy side in order to align with these new HOTMA regulations.
Colleen Winship: Yeah, it’s a lot. I think later in our conversation we’re going to talk about some of the challenges from an operational standpoint, but what do you see as maybe the top benefit that the residents could potentially see once HOTMA is fully implemented?
Jenny DeSilva: So I think if you look at the big picture about these changes, HUD did a good job of refocusing a little bit on what they were choosing to verify in terms of deciding whether someone was program eligible. So the shift has been more in identifying income and making sure that that income is being appropriately verified, whereas maybe before we had a little bit more of a focus on assets, but a lot of times people that had assets didn’t necessarily have income that were being generated from those assets. So it was kind of like, are we spending our time verifying things that aren’t really a high priority for us? So they took an opportunity to look at multiple different steps in the leasing and eligibility process and I think trimmed the fat where they needed to. But when they did that, they also threw in a few things that the industry wasn’t quite expecting.
And so, digesting this regulatory change upfront before you actually start implementing it is the first challenge that you’re presented with. It is a sweeping major change to how these HUD programs operated for 30, 40 plus years. And so, you have to approach HOTMA with a good attitude and an open mind, and the more you acclimate yourself and educate yourself on what HOTMA entails, I think the easier it becomes to digest what their motivation was and what the end results that they are trying to achieve are. That being said, we still have a few sticking points and a few things that we’re trying to get some clarification on, but all in all, there’s a lot of streamlining involved with this that’s going to benefit owners as well as residents in these programs.
Colleen Winship: Yeah, I couldn’t agree more. I think when you look at it from when it first came out, I forget how many pages the original HOTMA guidance was, but it’s daunting and it’s a legal document. But I also want to give a shout-out to folks like yourself and these industry leaders that help us break all of this complicated piece of legislation into sections that we can learn on a deeper level and make sure that we’re really understanding how to implement this and what it means for real life residents and property managers who are on site doing the actual work. I know you mentioned some benefits for the business, but I feel like a big question is why would anyone get involved in a HUD program if it’s so complicated? So can you talk a little bit more about how this would benefit the business and owners and agents? They have a large hump to get over to reach these benefits, but what’s the light at the end of the tunnel?
Jenny DeSilva: So that is a common question that the industry often poses to folks that are evaluating regulatory jargon quite a bit as they say. This is a lot of work. This is a lot of compliance work. Why do owners get involved in HUD multifamily programs? There are two main answers for that.
Usually, it’s guaranteed occupancy at their properties and secondly, it’s guaranteed income given that a portion of that income is subsidized from the government. I think in light of what the industry has experienced during the pandemic and even after the pandemic, continuous rental income has been something that we kind of took for granted I think before the pandemic occurred. Even now folks are still continuing to make sure that their outstanding receivables on the rent side are as low as they can possibly keep them and having that subsidy coming in has been a lifesaver for several operators.
So the benefit of having guaranteed occupancy in those units and a steady stream of federal funds is nice, but it does come with the obligation for compliance. And so, I think once you get educated about what your program requires and you really have a solid foundation and understanding of the program requirements and what you have to do, then you organically start reevaluating your operations to find out how can we do this efficiently without jeopardizing our level of compliance? HOTMA is going to test the entire industry with that task. So as you mentioned, the original final rule was 77 pages. And was it hard to read? Absolutely. It’s regulatory jargon. No one says, “Gosh, I just read it from cover to cover because it was engaging and the plot thickened.” No, this is regulatory language that we’re reading here, but it’s really important for those of us that interpret it and turn it into plain English that we read it so carefully that we identify where’s the discretion and where’s the regulatory requirements? Where do owners have some options and where is this a must? This is something that they have to do.
As a trainer, as a consultant, and as a policy writer, I take that role very seriously because I in turn then am going to share that information with folks and they’re relying on me to have read that carefully. So that final rule came out, and then ironically, HUD put out a supplemental guidance that was almost twice as long. So the supplemental notice that followed was 111 pages. And so here we thought we had kind of read through the first hump and then ultimately gets a second notice that’s just as long of a read but was probably organized better just in terms of clarifying what was required for each program.
And so, I think most people that are new to the industry are somewhat at an advantage because they didn’t know the old way the business operated, and now they’re learning this new HOTMA regulation and because they don’t have anything to compare it to, they’re more receptive to, well, this is the way we’re going to verify assets or income and whatnot now.
I think where the industry struggles to just accept this change and modify the way they run their business are the lifers just because they’ve known how they’ve done it for the last 30, 40 years and this is a major change and a major shift in how they operate. But I think the shock of HOTMA has kind of subsided and now we are digesting what HOTMA is requiring us to do and we’re really kind of getting down to business in terms of deciding how do we get this done as an industry so that HOTMA can be a success story. And ultimately, we’d be able to look back five, 10 years from now and say, “Yeah, that was a hard change, but it was a good change and now we’re seeing the benefits and that we think that those objectives were met.”
Colleen Winship: I think you made a good point. I think those that have been in the industry have a lot of unlearning to do, quite frankly because there are some very big changes where they’re going to have to rewire their brain, so what they thought was true and no longer is true. And so if you could just talk about some of those additional changes that we see, specifically some of the income and asset changes, if you could just give our listeners maybe a high level overview of some of those sections that have some of the major changes in them.
Jenny DeSilva: Sure. So I think a lot of fine-tuning or just clarifying how most of the industry was operating occurred in the realm of income. What we thought was income generally speaking is still income. There weren’t major shifts in the categories of inclusions or exclusions for income sources. Where we saw the biggest change was how we are annualizing or calculating those income sources and whether there are more verification techniques that are now available to owners. That’s the first big push that we saw in terms of operational efficiencies and administrative relief was there are some discretionary verification techniques owners can now utilize to annualize the income quicker. So for example, we are so accustomed to taking four to six consecutive pay stubs for wages and now we can accept two consecutive stubs, or better yet we can use the figures that are displayed on an income report if a tenant agrees with those sources.
And so that immediately shaves off a significant amount of time involved in the recertification process. Residents are going to like that change, owners are going to like that change. Perhaps the more contentious area where there were some major changes was in the scope of assets. This ties back to one of the objectives where HUD was trying to reevaluate making sure that there weren’t individuals living in assisted housing that could otherwise have means in financial accounts where they could get a conventional unit somewhere else and that would free up that unit for somebody who doesn’t have as many financial options. And so, they instituted two asset restrictions for individuals that either own property that’s suitable for occupancy and that they have a right to sell or individuals that have more than a hundred thousand dollars in what we deem assets by a new definition as available.
But those two asset disqualifiers are probably the biggest change that we’re seeing in terms of how assets play into a household’s eligibility or continued eligibility for assistance if they’ve lived at a property for several years. So that being said, there was a lot of other changes that they introduced in HOTMA for assets that again, make that recertification process quicker. We’re no longer going to care about retirement accounts, those are off the table now for us. Ways that owners can evaluate or verify someone’s assets now is a broader selection of verification techniques to include some self-certification. So we’re kind of mirroring a lot of those techniques that have been in place for quite some time on the low-income housing tax credit program and also kind of bringing in some of those concepts from Public and Indian Housing.
All in all, I think lifers or long-term industry folks are so used to verifying assets down to the penny exactly what they are. And now we’re kind of taking this approach that… generally speaking, if we verify assets at a certain dollar amount, we have to recognize that most assets for the majority of the residents that live in these programs don’t generate a whole lot of income, and it’s that income that plays a role in the rental calculation. And so why are we spending so much time verifying that someone has exactly $576 in their checking account when it’s not generating any income and it’s not playing a role in determining their rent? So refocusing the efforts where it really matters is I think an underlying objective that they were considering when they made some of these changes.
Colleen Winship: Yeah, I think I was really excited to see the self-certification changes that we saw. I definitely have probably more experience in the LIHTC world, and I know your bread and butter is HUD, but just to speak on the LIHTC end of things. One, when you’re working on a layered property and you have that HUD file and LIHTC file, sometimes they look drastically different. I think with HOTMA we’re moving into a world where those are looking more similar. So the onboarding and training for those that have those layered units or layered properties is going to be a lot easier and hopefully that’s… when we’re really talking about streamline, that’s what we’re hoping we will see as well.
Jenny DeSilva: Yes.
Colleen Winship: As we move on to an implementation discussion, which is where I want to take us next, I just want to highlight that LIHTC implementation is going to look a lot differently than HUD. HUD of course is on a federal level, so what they say goes for all of the contracted properties for these type of programs. For LIHTC, it really is up to the state agencies to give us more advice on how they’re going to implement this through their policies, through their forms, so on and so forth.
So we at AppFolio really encourage our listeners who have LIHTC properties to reach out to your state agency, get them thinking about how they’re going to implement these changes. And we’re doing the same thing. We’re doing lots of different outreach, trying to gather as much information on the upcoming implementation for state agencies because while we hope they will adopt most of these rules, they are able to have a say of how they’re going to adopt.
They could make things a little bit more restrictive. So while we love the two pay stub idea, state agencies could still stay on a more restrictive level and ask for more pay stubs. So it’s just something that you always have to be agile with, the state agencies and when you’re working with the layered properties.
So with that, I do want to talk about the implementation schedule. At the end of September, we received the very long-awaited supplemental notice or implementation guidance from HUD. And I will say I was very appreciative that it was an easily digestible document. I looked at that and I was like, “Ooh, this is something I can get on board with.” They had sections, they had dates. It was organized very, very well. At least for us in the industry I think that we appreciated that HUD took the time to outline some of these changes. But what was in the notice that I think was one of the most important aspects to take away is how we’re going to implement HOTMA, which is what they give us guidance on. So can you kind of talk through what those details were and what property managers should know about the implementation schedules?
Jenny DeSilva: Well, what is unique with the HOTMA implementation is that it’s not going to be the same type of implementation schedule for every owner. It is going to be a staged process and every owner could potentially have a unique implementation timeline throughout the 2024 calendar year. The one benchmark or the one milestone that is consistent for the entire industry is March 31st, 2024. That will be the date that everyone has to get their tenant selection plans, their EIV policies, their house rules and other discretionary policies written and finalized.
The second phase, which is going to be property specific — and, frankly, vendor specific — will be the real legwork of incorporating in all these HOTMA changes begins when an owner installs their new TRACS 203A update from their vendor. And so when that occurs, it might be June or July for one owner and it might be August for the next owner. So at the end of the day, everyone, regardless of what vendor they’re using, has to be fully compliant with HOTMA regulations by the end of 2024 so that everyone is starting on the same platform as of January 1st, 2025. I think everyone has to really very strategically and very carefully outline their implementation schedule in 2024, obviously on the front end at the beginning, do what you can do now and have it ready to go.
And then you get into the more complex discussion of really working with your vendor and having strong dialogue with your vendor to make sure that you have a good idea of when you think you’re going to… I don’t like to use the term kind of flip the switch, but to simplify the process. Once you implement HOTMA and you install your TRACS 203A version of your software, then you’re in it. There’s no going back and doing a redo. So planning and familiarizing yourself with that process and being adequately prepared for what comes afterwards is going to be key for the industry. That’s where dialogue and whatnot with your vendor really comes into play and is very important.
Colleen Winship: Absolutely, and just speaking from a vendor perspective, we really do love talking to our customers. One of our favorite sayings at AppFolio is talking to customers is in our DNA, but I think it’s so much more important now with HOTMA. We want to know where our customers are at, how are they feeling about HOTMA and how can we help simplify this process and also be transparent on what the changes are going to be in AppFolio and how they can better prepare for those. Like you said, some of it does have this owner discretion part of it, so just getting prepared enough from an owner agent side to know what you can and can’t opt out for. Like you said, what is a must? What is a nice-to-have sort-of thing? And how are you going to make those changes throughout your portfolio?
Jenny DeSilva: Yeah, and those are really evaluations that you can start thinking about now. What a family property might do with a population that is actively working, and in terms of discretionary measures they might select as beneficial to them, might be very different than what a senior community might consider for households that typically have pretty fixed income sources. And so this is not a one-size-fits-all option, so familiarity with your options and knowledge of what is going to change, that alleviates a lot of the anxiety and the fear related to this change.
Colleen Winship: Absolutely okay, I want to ask you this: I’m a property manager. I’ve somewhat learned about HOTMA, maybe I’m not an expert yet, but I’m starting to think about my 2024 planning, how does that look? What are some key milestones that you would suggest that the property managers should start working on now? One thing that I don’t want to happen is for people to see a 2025 date and say we have time because from my perspective, let’s start now. Let’s start working on this now so we can get it right. What are some key milestones that you could advise some of the property managers on what they should be taking?
Jenny DeSilva: So you’re absolutely right. This is not a let’s start thinking about this in quarter four of 2024 initiative, or those are going to be the folks that are going to scramble and either not be prepared by that deadline or come in by the skin of their teeth. So in order to really methodically do this, there’s going to be some very crucial front end tasks that your operation can do now.
One is take advantage of as much training as you can possibly expose you and your staff to now so that you will find that one instructor might say it one way on an online training and another might say it another way on a live training and hearing it discussed from different individuals from different perspectives that might have different backgrounds is going to only reinforce your understanding of the regulation or test how much of that you’ve actually retained from one training to the next. The policy development is a forced completion task in quarter one of 2024. Everyone’s got to get their policies updated and in line and that requires you to make some of those discretionary policy decisions early in 2024.
Other things that we need to think about outside of just our administrative operation is communicating this change to your residents, getting residents some buy-in on some changes, but also just alleviating their fear or their frustration or their anxiety because their neighbor is going to get re-certified and they’re going to find out, “Wow, there’s a lot of changes with how they did that interview. They’ve really overhauled this process.” So communicating all of these changes to residents is key. Making sure that they understand things that are going to be easier for them during the recertification process, calculations that are going to look a little different. We’ve got new deduction amounts that are being incorporated into HOTMA. We’ve got things that we might’ve asked for in a last year’s annual re-exam that we don’t need to see this year because we don’t care if you’ve got a retirement account out there.
So reassuring them that you’re consistently applying this to the entire resident population. You’re not singling out individuals or playing favorites based on decisions that you make with a calculation logic. That is an important message that needs to be relayed to the residents. And you have to remember that not all of your residents might have the same capacity to understand this, so it needs to be relayed in a way that is digestible and easy to understand and that might incorporate reasonable accommodations for those with disabilities as well as evaluating your method of communicating to individuals that have limited English proficiency. We need to make sure that we’re not letting any household, be it with a disability or language barrier, fall through the cracks and not get the message on how this is going to impact their rental calculation and their obligation to report for a re-examination.
I think most residents will appreciate identifying the consistency that is incorporated into making these changes and that will reassure them that owners and agents are familiar with the change and that there’s a reason behind why they’re doing things differently this year. So I think all of these tasks that we’ve talked about, whether it’s implementation, forms changes, policy changes, resident buy-in and decisions you’re making now on training opportunities, that is not something you do on a Thursday and have it all done by Monday. To back into a completion date by the end of next year requires that you be proactive and start doing what you can now so that you’re not crunching and doing everything in the summer or in the fourth quarter of 2024 when you could have gradually done this throughout the year. That’s going to be easier for your residents, it’s going to be easier for your staff that are actually having to pull this off.
Colleen Winship: I think planning now it’s a good time and HUD has given us this extra, I don’t want to say grace period, but extra time to reach full compliance. But now is the time where you can be in the planning stages. It’s probably budget season for most portfolios out there. Being able to have those thoughtful conversations with your owners. Is there going to be one HOTMA expert on your team? Are you going to put in the time to train all of your staff? What do some of those trainings look like? Who will be the one to be in charge of updating the policies and forms and making sure that you have the dedicated plan for 2024 in order to be successful?
We all talk about employee turnover and especially property management and affordable housing, and I think it’s important to be conscious of what this means for the property managers. It is added workload and making sure that you’re able to support them as best as possible through these changes I think is also very important. And now we have the time, so there’s no excuses, we can get started now and there’s so many different resources and agencies out there that can help us reach these types of goals.
Jenny DeSilva: Absolutely. Knowledge is power. It truly is. With changes as significant as this, this is something where it’s risky to have all of your eggs in one basket, I think, where you’ve got one individual in your agency that is very well versed in HOTMA. But if they were to leave your agency at some point, would you have a plan B for that? So really evaluate who you’re going to train, who’s going to be involved in this process. There’s something to be said about having departmentalized or specialized folks that might be focusing on one part of the implementation instead of having a jack of all trades master of none because if that one person that leaves you, now you’re high and dry. So managing your risk to ensure successful implementation is not something that you should overlook in your planning process.
Colleen Winship: Right, absolutely. Being able to scale for the future: what does your unit growth look like? What is your acquisition growth look like? All of those things. Speaking of some of those operational needs, and this year in 2023, AppFolio did a report for the top challenges and opportunities in affordable housing property management and 75% of the respondents ranked operational efficiency as their top challenge. How do you think that HOTMA will interrupt some of these operational efficiencies and how can we navigate this through the HOTMA challenges or HOTMA changes as well?
Jenny DeSilva: Well, I think individuals who are familiar with what HOTMA entails and recognize the discretionary options that owners now have to streamline verifications in order to potentially consolidate recertification tasks between programs or to align some of the timing of when they do tasks for recertification, if they’re recertifying all of their residents all at once or optional discretionary changes that they can make in what they choose to utilize in the EIV system. These are all things that if you pull them off and you’re smart about how you implement them will absolutely save you some time and time saved equates to operational efficiency. But I think equally important ingredient to that recipe of streamlined efficiencies is having a software that can automate what it can for you, track what it can for you, report what it can for you.
So having a product that is integrated where your ledgers are integrated with your TRAC submissions and your repayment modules are integrated and you’ve got special claims features, all of these things that collectively make your job easier at the site, that’s going to free up time to ultimately do what we are tasked with doing as stewards of HUDs funds and as public servants. And that is making sure that our communities are safe and that our units are in good condition and that we’re appropriately subsidizing the households that live there. I think people sometimes underestimate how crucial a role software plays in meeting that objective. So I think this is the time now for us all to be thinking about what can software do for us that will not jeopardize our compliance, but make our jobs easier so that we can go home at the end of the day.
Colleen Winship: Absolutely. I couldn’t agree more. Before we wrap up, I just want to ask you one last question. When it comes to the future implementation of affordable housing legislation, what’s one thing that you hope to see change in the future?
Jenny DeSilva: I would say if there was one element that I think could be improved upon is the individuals that ultimately release regulatory guidance, maintaining open lines of communication with the individuals that are then in turn required to follow that guidance. I think the more you are involved in this industry, the more you can recognize that regulations written might seem really cut and dry, but pulling them off in the real world might be an entirely different challenge that the author didn’t consider when they were deciding how it was written. And so I think the more that HUD can have open productive relationships and communication discussions with the individuals that are employing these new regs in this program, the more it’s going to be a success.
Sometimes I think there’s this tendency to have camps that want to make the rules and then tell the other groups that these are the rules that they’re going to follow, and the more we can establish a partnership between those two groups, the more it’s going to be a success for everyone and it’s a win-win. We’re all taxpayers and we want to see federal funds used appropriately and as efficiently and as correctly as possible. And program success really takes both parties actively collaborating and talking about how this can be successful. And so I would encourage HUD to maintain those lines of communication with the industry and be receptive to what the industry tells them what works and what doesn’t work with the way regulations are written.
Colleen Winship: Yeah, absolutely. I think the concept of “boots on the ground” is going to become even more important, and if HUD could somehow be open to a debriefing topic or discussion after all of this HOTMA implementation is said and done to know what went right, what didn’t go right, what is working because I think one of the things that I’m anticipating with these HOTMA changes is some more continuous changes from HUD on a wider cadence. We haven’t heard anything new since 2016, but I think one of the changes with these inflationary changes is it’s going to change year after year. So being able to communicate with HUD is very important, especially knowing that some of these changes are going to be more active as the years go forward and hopefully open to hearing from those actually working the files and onsite to make sure they know how to enact the changes appropriately and make sure we’re on the path forward to a brighter future.
Jenny DeSilva: Right. We all want to see the program work and the roles that we play in achieving that are different, and the more we can not work in vacuums and isolate our role, but really see it in context for the bigger picture, the better off we’re going to be.
Colleen Winship: Absolutely. Well, I want to thank our audience for attending this session. I want to thank you, Jenny. You are a valued partner for all of us here at AppFolio, and it’s always so great talking to you and thanks so much for taking the time.
Jenny DeSilva: My pleasure.
Megan: With HOTMA’s implementation, there’s little doubt that the next few years will be quite an adjustment for affordable housing management teams, public housing authorities, private owners, and residents alike. But the benefits HOTMA promises to bring could very well be worth the short-term learning curve needed to become fully compliant by January 1, 2025.
As Jenny and Colleen discussed, the key to navigating these new regulatory changes is to be as proactive as possible. That includes:
- Getting teams trained on HOTMA changes now
- Educating residents on what verification and administrative processes will be changing, and why
- Making sure day-to-day operations are streamlined and ready for implementation
- And leveraging the right technology solutions to help you more easily manage HOTMA changes and ensure full compliance
We’d like to thank Jenny DeSliva and Colleen Winship for being on this episode of The Top Floor podcast, and for letting us all listen in on their amazing and informative conversation.
We’d also thank all of our amazing listeners for tuning in and joining us today. We’ll see you next time, here on The Top Floor podcast. To learn more about how you can effectively manage your affordable units, download our free guide below.