Palm Beach County gave $1.7 million in federal housing loans to nine county employees and the daughter of a county employee in violation of rules requiring special approval when conflicts of interest may exist, according to a U.S. Department of Housing and Urban Development audit.
The April audit of the Neighborhood Stabilization Program recommends that the county be forced to pay back the money, part of $77.7 million it has received since 2009 to improve communities hit hardest by the real estate crash.
The money is used in part to give low-interest mortgages to people buying foreclosed homes in specific neighborhoods. Waivers can be obtained for employees with possible conflicts of interest, but they must be reviewed and approved by HUD.
Assistant County Administrator Shannon LaRocque said that eight of the loans were disclosed to the county commission, which approved them during regular board meetings, but that no one knew a federal sign-off also was required. The county disputes that two of the loans violated the conflict-of-interest rule.
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