Enlisting BI to Reduce Affordable Recertification Risk

Business intelligence (BI) continues to pay off in affordable housing. At a time when the industry is coping with rent recovery and other issues brought on by the pandemic, BI is helping operators stay on top of mandatory recertifications. Earlier this year, RealPage offered introductory trials of its affordable BI platform to operators, and the response was overwhelming. Many clients dispelled the myth that BI is a luxury rather than a critical business asset, and brought it on board. The widespread adoption of BI signifies that the subsidized housing industry is ready to automate many of the arduous compliance processes, says Darlene Liu, Director of BI Product Management at RealPage. Easier navigation of state and federal regulations is one reason, especially this year as operators have been distracted by the need to closely monitor delinquency and collections during the pandemic. Another is getting a quick take on potential risks associated with being out of compliance. Reducing tax credit and HUD non-compliance Letting the annual process of recertifying residents slide at tax credit and HUD properties is risky. The tax credit penalty or loss of subsidy can be steep if an audit finds a property not keeping up with the rules. “If you’re audited and they find you have been charging more or you’re out of compliance, you can lose your tax credits or subsidy payments will be withheld,” Liu says. “It’s especially painful for tax credit properties. If they are found out of compliance the IRS can recapture their tax credit allocation.” It can be equally troublesome for HUD properties that don’t qualify residents for an apartment each year as mandated. The agency often won’t pay its portion of the rent until paperwork is submitted. And since all recertifications – whether for tax credit or HUD properties – don’t happen at once, it can be cumbersome to keep up with due dates. Getting in front...