Red-faced city housing officials acknowledged Friday they goofed in not discovering that a man they loaned $3 million to repair a Hollywood apartment complex had pleaded no contest previously to slum-related crimes at the same property.

“We checked him out originally, and his criminal record wasn’t dirty,” said Dan Falcon, special assistant to the Housing Department’s general manager. “We’ll have to double-check our system.”

Told by the Daily News this week of Craig Hill Dennis’ background, housing officials insisted he has become a “reformed slum manager.” Dennis, they said, has done a “decent” job using his city earthquake loan to shore up the Lido apartment building after it was rocked by the Northridge temblor.

Supported by area Councilwoman Jackie Goldberg, Dennis, a Studio City resident, now is applying for another $3 million city loan to purchase and rehabilitate a nearby apartment also damaged by the quake.

“He got caught, he got fined and he turned himself around,” Goldberg said. “I do think people can learn.”

Five years ago, Dennis, the manager of the 137-unit Lido complex, and its corporate owner, were charged with numerous violations following a visit by city building and safety inspectors. They found rodent and cockroach infestations, missing smoke detectors, inoperable fire escapes and damaged ceilings, among other problems.

Dennis and the owner pleaded no contest to the charges, and a judge sentenced them to three years’ probation and ordered them to pay roughly $15,000 in fines and costs. When a court-imposed deadline lapsed before all the repairs were completed, they were slapped with community service and additional fines.

Dennis said the Lido was being retrofitted to meet toughened municipal earthquake codes when the inspectors trooped in and directed him to close up exposed interior walls. Complying with that, Dennis said, would have scuttled the seismic reinforcement so as a manager he refused.

“There probably was some problems at the time, but the Building and Safety Department has their own separate agenda, and sometimes you get stuck in it,” said Dennis, who now owns the Lido. “I was very vulnerable.”

Richard Bobb, the City Attorney’s Office housing enforcement supervisor, said Dennis was a victim of bad timing. However, the cockroach infestation and other violations were unrelated to the retrofitting, he added.

“It was a very bad slum,” Bobb said.

What is baffling, Bobb said, is how Dennis could apply for and secure a $2.3 million city loan, plus $700,000 in additional financing, without officials learning of what had occurred.

“The Housing Department should know about his conviction,” Bobb added. “It’s public record.”

Falcon said people with slum-housing records can get city loans, but it’s rare, and they must prove they’ve changed their ways. Dennis, he said, has done that, though the department had erred in not uncovering the man’s past.

“As a result of this incident, we will check to make sure other people borrowing from us haven’t fallen through the checks,” Falcon said.

Dennis now is applying for a $3 million housing department loan to buy and rehabilitate an 87-unit apartment dwelling on Cherokee Avenue.