City Program for Home Loans In Limbo, Awaiting Council Approval
Monday, March 4, 2013 • 9:20am
PATERSON, NJ – For the first time in more than two decades, the City of Paterson is not providing assistance to folks who are making their initial attempts at buying homes.
The municipal Community Development department asked the City Council to approve this year’s program back in July, according to a city memo provided to PatersonPress.com. But the council has not yet taken a vote on whether to authorize the use of the money.
About 20 people are on the city’s waiting list seeking the first-time homebuyer loans, according to Community Development Director Lanisha Makle. [Editor's note: The following two sentences were added to this story for clarification.] Under the program, the money is provided to the homebuyers in the form of loans that do not need to be repaid as long as the recipients remain in thes for 10 years. At that point, the loans become grants.
The city has set aside $150,000 for the program during the current fiscal year, she said. The city uses funding from the federal department of Housing and Urban Development for the loans.
“I don’t have the authority to move those funds until the council approves the resolution,’’ said Makle.
Mayor Jeffery Jones blamed Councilman Kenneth Morris, chairman of the council’s community development committee, for blocking the resolution. “It was presented to them in committee,’’ Jones said. “He’s stopped it from going through committee. We can’t put something on their agenda. It has to go through their committee.’’
Morris said he does not recall the administration asking the committee to consider the resolution. He said he does remember council members having some concerns about the administration’s desire to reduce the size of the loans from $30,000 to $15,000 because they felt the lower amount was not enough support for first-time buyers. Morris said council members had some questions about the amounts and has been waiting for a response from the administration.
“That’s where it was last left,’’ Morris said.
Another member of the community development committee, Councilman William McKoy, also maintained that the council never received the resolution. “I would find that shocking,’’ said McKoy, when told that the city’s first-time homebuyer’s loans have been a non-starter this year. “I don’t recall ever being presented with that resolution,’’ McKoy added.
“Tell her (Makle) to show you the resolution that was presented to the council,’’ Morris said.
When asked for a copy of the resolution, Makle provided PatersonPress.com with an electronic version of it within 10 minutes. The resolution would authorize the community development department to approve all first-time homebuyer assistance up to $15,000 and it says any amounts larger than that would require council approval. A note at the bottom of the resolution says Paterson Corporation Counsell Paul Forsman signed off on it on June 29, 2012.
Makle was on suspension in July 2012 when the emails from two of her staff members to Morris asked that the resolution be considered at an upcoming community development meeting. It’s not clear exactly when or whether administration officials actually presented the resolution to the committee at one of its meetings, or just through the email to Morris.
There are four months remaining in the current fiscal year, more than enough time for the resolution to move through approval process and for the loans to start flowing. There’s no indication the city would lose the money if the $150,000 is not spent by the end of June. Usually, the federal government provides localities extra time to spend down HUD funds.
In order to be eligible for the loans, folks must take a training course and be deemed eligible for the aid. The Paterson Housing Authority handles those tasks, conducting monthly classes that an average of 10 to 20 people in them. To be deemed eligible, applicants must show they are credit-worthy, said Lucy Ruiz, a housing counselor at the housing authority.
With the city government’s loan program in limbo, the housing authority has been referring folks to other entities, including private banks, that provide the first-time buyer assistance, Ruiz said.
Carol Gladis, the housing authority’s director of planning and grants, said there was no way for the agency to know whether all the folks referred to the other entities were able to get the loans they were seeking.