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Software for managing HUD-subsidized properties.

If you manage subsidized multifamily housing, you probably could benefit from a special type of property management program usually referred to as "HUD software." A program of this type will make your work much easier, if you have the right one for your needs.

Keep in mind that HUD software does not mean software that HUD blesses, evaluates, or endorses. All such software comes from private vendors, and HUD no longer certifies any program.

Also be aware that selecting the best HUD program for you is not merely a matter of following the herd. Nor is it as simple as finding a program with the functionality you desire. Once you narrow down the functionality aspects of the program, you need to consider the mechanical/structural/operational ones. And especially with HUD software, you also need to consider the future commitment of the publishers involved.

Functionality

HUD software functionality is basically an overlay for a general multifamily property software functionality. The fundamental relationship of the former to the latter is like that of an ice-cream sundae to ice cream in a dish. To make a good sundae, you need good ice cream underneath.

Similarly, in order to have good HUD software, you need good conventional-property software underneath. For example, you need good tenant function for charging, cash receipts, and housekeeping. And you need good reporting, as well as the thousands of other aspects of a good multifamily program.

The fundamental function of HUD software is to produce paperwOrk for submission to HUD or other agencies. The primary program output is related to the official forms of HUD and other agencies. Basic variations include printing attachments for forms, printing formats of the forms, or printing directly onto the forms. At this level, the system is merely a typewriter emulator or substitute.

The most common form produced from HUD programs is the basic 50059. Other widely available forms include HAP Requests and Excess Income Reports. Some programs are more comprehensive and include, for example, FmHA forms, HUD 50058, and Special Claims forms.

Some of the programs go farther and produce printed facsimiles of official forms. Some allow for submissions of forms on diskette. With the development of HUD's computer-based Tenant Rental Assistance Certification System (TRACS), electronic submissions will increase.

The second major functionality of HUD software is help for preparing these forms. The programs assist in various ways. For example, one way is to produce more of the necessary or useful auxiliary paperwork such as recertification notices to tenants, rent changes, terminations, and worksheets for form preparation and submission.

Another way in which HUD programs assist in preparing required paperwork is by helping the user work through the intricacies of content. For example, in processing recertifications, the program may actively guide the user in regard to entries by providing explanations of rules and assistance in calculations. Some programs provide on-line, contact-sensitive references to the HUD manual while others provide the manual itself on line.

Programs also help control against erroneous entries. For example, missing, conflicting, or inconsistent entries, or those in conflict with regulations, may be prevented by the program.

Beyond the paperwork aspects, HUD programs provide many other important functionalities for subsidized property management. Some functions include tickler systems for recertification, vacancy and move-ins and outs, unpaid rent and damages, subsidy type changes, historical records of 50059s or recertification, uncompleted certifications, expenses, and assets. Special functions may include gross rent changes, utilities, waiting lists, inventory, and remote site capability.

Mechanical/structural/operational aspects

You cannot determine how well a particular program will work for you until you look carefully at its underlying design. Because the term "design" is related to "appearance," it is easily dismissed as unimportant. But the design is really about the "mechanical" aspects of a program: all the elements that enable a program to perform its functions.

In considering functionality, the question is: "What does a program do?" In analyzing design, the question is: "How does the program do it?"

HUD solutions are particularly susceptible to structural/design problems. Problems may occur in the structure, mechanics, and operations of a program.

To clarify the issue, consider such problems in the context of your car or your property: weak frame, awkward relationships among components, cumbersome navigation, hard to operate. These types of problems are essentially the same ones found in software programs, except that because of the new, fastmoving, and highly complex technology used in the software, they occur more often.

Structure. A property management program should have a general structure that provides for files containing data, processing functions, and output functions. Programs that have problematic structures have basic designs, or retrofits/patches, that confuse or mix up files with processing or output.

For example, while better programs maintain data in files, others incorporate it into processing or output functions. A consequence of this misplacement is a more limited capability for the program.

HUD systems are generally out of balance. A few are file oriented and not strong in processing or output mechanics or operations. Most are processing oriented and weak in file or output dimensions. And a few are output oriented and lacking in file or processing features.

An example of a structure problem is the placement of subsidy-related data for tenants. Where is the data stored? In a file? In the HUD module or in the already-existing tenant file? Is the tenant file expanded? Are sub-files developed? There are several variations in use, each with consequences. For example, the file structure of this particular data is a key to the kind of reports you can obtain from the program.

Files. Conventional multifamily programs need files for at least properties and tenants. Most programs have additional files for such data as companies, projects, buildings, units, and lease terms.

HUD solutions need to add much more data to the mix, ideally in the form of files. Additions for HUD programs should include files for units (if not already in the system), subsidy contracts with HUD or other agencies, and subsidy-related data for tenants including household composition, assets, income, expenses, and so forth.

A few of the many file-related issues connected to a HUD system include:

* Is full integration achieved with interactive sharing of tenant and unit files between the HUD module and the PM module or section?

* Can new HUD applicants and tenants be fully set up in only one place and still fully satisfy both modules?

* Are tenant records fully updated for all transactions?

* Are history files available? Transactions? Detail? Status changes? How are these files stored?

Background/reference files. In addition to the data that is related to entities and transactions in the "master" files, other information needs to be available in a HUD program. Again, the use of files is the best overall method for containing such data.

The types of data to look for include: income-limits tables, charge/income codes, rent schedules, useful parameters, subsidy programs, agencies, and references or on-line text of the HUD manual.

Things to check in this area when evaluating a program include:

* Is the reference/background information available at all in the HUD program?

* If so, how is it stored or accessible? In files or otherwise? From menus or otherwise? Directly or otherwise?

Processing and output. Conventional multifamily programs have specific processes for generating charges and handling cash receipts. They also include housekeeping functions such as move-in and move-out.

The HUD component adds considerable complexity. Even a conceptually simple thing such as keeping track of separate payments from a tenant and the subsidy contribution can be a problem for some systems.

HUD situations also bring more complexity in housekeeping, tenanting with waiting lists and applications, certifying, billing, and recertifying. While much of this can be accomplished in the HUD module, the property management program itself must be enhanced to accommodate the functions.

Producing output is a major function of HUD programs. However, merely checking to see how the reports, forms, and other documents look is the equivalent of kicking the tires to judge an automobile. The mechanics of form preparation, compliance help, and access to history records should also be very important to you.

Software configurations

A special design aspect of HUD software is the configuration of the major system components. Even within the small group of HUD-software vendors, there are significant differences in the configurations of the programs. The primary configurations are stand-alone HUD specialty programs, interfaced programs, and integrated programs.

Stand-alone programs. Over the last several years, two programs have been primary examples of stand-alone HUD-specialty software: MicroHUD from Project Data Systems (PDS), and HUDManager from A&M Software.

While PDS also offers MicroRENT, a tenant accounting module, these programs were originally designed to focus on the HUD/subsidized aspects of management and not to provide the remaining property management software functions. In the stand-alone operating mode, the user must enter and maintain redundant data in a HUD-specialty system and in a regular property management program.

Interfaced. A well-established option offered with some generic property management software is a special electronic or software interface to a stand-alone HUD-specialty program. With this configuration, redundancy of data entry can be avoided.

Ausmus, Yardi, Softa, AMSI, Maxwell, and Timberline are among the vendors that provide such interfaces. A&M Software has been especially focused on this strategy.

Integrated. The third primary configuration is for generic software programs to include a special HUD/subsidized module. Primary examples of this approach include CAM Systems, American Computer Software, Prentice Hall, Management Reports, Inc., Systems Specialists, Inc., and TenMan Systems.

Future of configurations. In general, because of the redundant data entry, stand-alone configurations are not as good as interfaced or integrated configurations. And in theory, because interfaced configurations are patched together from different vendors, they are not as good as integrated solutions.

In practice, however, the integrated programs as a group also suffer from a significant degree of patching. And some of the interfaced configurations offer greater functionality and an all-round better fit for many users than the integrated solutions. It all comes down to comparing specific solutions in relation to your own needs.

But you cannot merely look at current needs. You must consider the environment and how the future of HUD software publishing will evolve. Because of changes by HUD, it is essential that vendors update HUD programs responsively. If a non-subsidy property management software vendor does not provide desired changes, you can usually live with it. But in HUD software, if your vendor does not keep up with regulatory changes, you can have serious problems.

While there are several dozen generic property management programs available, there are fewer than one dozen HUD programs. The HUD-software publisher also has a tougher job than its generic cousin. It has much less choice in the changes or improvements it makes to its software; many will be defensive in order to keep the program compatible with required capabilities. It must also make many of these changes with time periods not of its own choosing. And it must sell in a shrinking, more budget-constrained market.

In using generic property management software, you can be relatively flexible in adapting to your vendor's behavior. But with HUD software, you cannot be so easygoing. For this reason, you may want to consider a vendor whose primary business is maintaining and upgrading the HUD aspects of the software--most probably a stand-alone program publisher.

One weakness in this solution is that the publisher of the interfaced generic property management program must also keep up with the HUD-related improvements. But it is much easier to maintain an interface than an entire module. And with an interfaced solution, you can replace a generic property management program without losing the HUD program. On the other hand, a multi-vendor solution can be problematic if the vendors point figures at each other whenever a problem arises.

The ideal theoretical solution is vendors that offer a choice of either an integrated or an interfaced solution. The practical weakness in that option would be the incentives for the vendor to gradually weaken the interfaced solution.

In general, your options will continue to develop in relation to trends in the market. Publishers of generic property management software programs must compete primarily in functionality areas other than HUD capability. As a result, HUD may not be their top priority. Some of these publishers will not continue to upgrade their HUD modules and will gradually fall behind. However, they may continue to sell their HUD software for a long time.

Eventually, there will be a shake-out of HUD software vendors. New stand-alone programs are unlikely; solutions will be interfaced or integrated. Interfacing is an easy way to go, and because leaders such as Yardi, Softa, AMSI, and Timberline have chosen this option, others will likely follow.

Publishers of stand-alone programs will seek more interfacing or integration to move into the generic property management market. CAM already has done that by broadening its system. PDS currently offers interface possibilities with several accounting and property management programs, but potentially could develop a deeper interface with a generic accounting program such as ACCPAC, published by Computer Associates. That would produce a configuration similar to the one that ACS has in its interface with Great Plains accounting software.

Conclusion

Overall, there are significant differences in the functionality of available programs for managing subsidized properties. A meaningful number have good HUD modules or interfaced stand-alone programs. The primary difficulty is in the mechanics/structure/design of the systems.

But the solutions are much better than ever. There is no reason to wait for something new. You only need to pick the best software program for your needs.

Michael J. Hanrahan is president of Real Estate Software Advisors in San Francisco. He has been a real estate software reviewer and consultant since 1983. He has independently evaluated more than 150 real estate software programs.

Mr. Hanrahan has been in the real estate business for more than 25 years. His academic background includes Ph.D. studies and bachelor's and M.B.A. degrees in real estate, urban economics, and applied economics from the University of California, Berkeley. Prior to focusing on real estate software, he was vice president and director of research of Questor Associates, the predecessor company to Roulac Real Estate Consulting Group of Deloitte & Touche.

Mr. Hanrahan advises, writes for, and conducts workshops and seminars for real estate companies and departments, trade associations, and publications.

HUD/Subsidized Software Vendors

Publishers providing HUD/software include:

A&M Software, Inc 214 N. prospect Street Burlington, VT 05401 (800) 448-3647

Project Data Systems, Inc. 1050 Northgate Drive, Suite 400 San Rafael, CA 94903 (415) 492-1840, (800) 421-1314

CAM Systems, Inc. 3071 Peachtree Road NE Atlanta, GA 30305 (404) 233-4162, (800) 544-7569

American Computer Software, Inc. P.O. Box 6408 Madison, WI 53716 (608) 221-9449, (800) 527-9449

Prentice Hall Professional Software 2400 Lake Park Drive Smyrna, Ga 30080 (800) 241-3306

Management Reports, Inc. (MRI) 23945 Mercantile Road Cleveland, OH 44122 (217) 464-3225, (800) 321-8770

TenMan Systems, Inc. 2250 E. Devon Avenue Des Plaines, IL 60018 (708) 699-7500, (800) 621-8341

Systems Specialists, Inc. (SSI) 12300 Twinbrook Parkway, Suite 230 Rockville, MD 20852 (301) 770-2600, (800) 783-2603

Publishers providing interfaces for HUD software include:

Ausmus and Associates, Inc. 3335 Federal Road Pasadena, TX 77504 (713) 944-1312

Yardi Systems, Inc. 819 Reddick Street Santa Barbara, CA 93103 (805) 966-3666

Softa Group, Inc. 707 Skokie Boulevard Northbrook, IL 60062 (708) 291-4000

Alternative Management Systems, Inc (AMSI) 9801 Westheimer, Suite 600 Houston, TX 77042 (713) 785-0265, (800) 231-0605

Maxwell Systems, Inc. 2838 DeKalb Pike Norristown, PA 19401 (215) 277-3515, (800) 688-8226

Timberline Software Corp. 9600 S.W. Nimbus Beaverton, OR 97005-7163 (800) 638-6583

Editor's Note: Programs are listed roughly in order of cost, the least expensive first in each grouping. Additional information on the general functionalities of these programs may be found in Parts I, II, and III of A comparison of Property Management Accounting Software, now available as a booklet from JPM.

Computer Developments

New software guide

CTS, a Rockville, Md., software company, recently released its 1992 Guide to Accounting Software for Property Management. The 150-page guide evaluates eight leading software systems, including those produced by the Great Plains, MRI, Skyline, and Timberline companies. It includes a narrative description of each program's capabilities in the areas of general ledger accounting, accounts payable, and property management. The programs reviewed are compared to 500 variables that cover master files, transaction processing, reporting capabilities, user documentation, and other items.

Low-cost maintenance software

New from OmniComp, Inc., State College, Pa., is the Wedge Maintenance Tracker, a program for scheduling, tracking, and printing corrective and preventive work orders. The program, priced at under $1,000, features a highlighted bar menu, mouse support, and "point and shoot" work orders. It tracks an unlimited number of work orders, trades, equipment items, cost accounts, and other documentation, and prints preventive maintenance orders automatically.
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Title Annotation:Computers; includes a directory of HUD/subsidized software vendors; Dept of Housing and Urban Development
Author:Hanrahan, Michael J.
Publication:Journal of Property Management
Date:Nov 1, 1992
Words:2809
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