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HUD Probe Prompts New City Restrictions on Paterson Pride Funds

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PATERSON, NJ – As federal officials investigate the $43,000 in home repair funds Paterson gave to its personnel director last year, the City Council has placed new restrictions on the program designed to help homeowners with modest incomes.

Under a resolution adopted Tuesday night, the community development department would not be allowed to approve Paterson Pride program loans and grants that exceed $15,000. Any funding larger than that would require the approval of the city council, according to the resolution.

A similar limit also was placed on the community development department’s handling of first-time homeowner loans.

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In the past, there had been no municipal restrictions on the amount of funding that the community development department could approve, said Councilman Kenneth Morris, who chairs the committee that oversees that department. Morris said the limit was imposed partly in response to the situation involving the $43,000 embattled Community Development Director Lanisha Makle granted to personnel director Betty Taylor.

The United States Department of Housing and Urban Development is investigating whether Taylor exceeded the income limits under the Paterson Pride loan program. In December 2010, when Makle approved the home repair money for Taylor, the personnel director was making $81,947, well above the income limit of $58,400.

But when Taylor initially applied for the home repair funding in 2009, she was in a lower-ranking city job and made $53,868. Questions also have arisen whether Taylor qualified for the funding in 2009 because her application listed her nephew as part of her household.

Under Paterson Pride, residents receive home repair loans that must be repaid only if they sell the property within 10 years.

The federal investigation followed a northjersey.com story that disclosed the loan to Taylor.

Neither Makle nor Taylor returned phone messages seeking their comments.

At Tuesday night’s council meeting, one member of the audience questioned why officials were allowing the community development department to continue making decisions on Paterson Pride funding.

“Just to give them authority like that is somewhat out of context,’’ said David Gilmore, who has focused attention on the controversy on his Facebook.com page. “There needs to be some additional checks and balances in place.’’

But Morris explained that the resolution contained such provisions through the $15,000. “In the past, the department could approve much higher amounts,’’ he said.

Morris also said the council did not want to take the authority to approve smaller Paterson Pride loan because that step would slow down the funding process for homeowners who might need the money quicker.

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