Twenty-five apartments in Pittsburgh’s Knoxville neighborhood will remain affordable for low-income residents for at least 40 years after the city’s Urban Redevelopment Authority board last week approved the first loan from its new Housing Preservation Program.

The program, which launched last month, provides financial assistance to people who own or are buying affordable housing units. The URA hopes the help will encourage those people to maintain the units as affordable housing, rather than shutting them down or converting them to market-rate housing.

Officials designated $8.9 million in American Rescue Plan Act dollars for the initiative, which will help fund the acquisition, rehabilitation and operation of existing affordable housing throughout the city.

The URA board on Thursday approved the first loan through the program. The authority is offering Mount Lebanon-based Spring Capital Partners a $850,000 loan for the developer to purchase and rehabilitate a property on Zara Street in the city’s Knoxville neighborhood.

The site is a 22-unit apartment building that accepts Housing Choice Vouchers.

URA officials said the property is currently for sale, and if another buyer purchased it, the units could be transitioned to market-rate housing.

Instead, Spring Capital Partners has committed to purchasing the building and maintaining all of the existing units as affordable housing. They also will add three new units of affordable housing at the site.

All 25 apartments will be affordable to people making no more than half of the area median income for at least 40 years, according to Ben Peyton, senior lending analyst with the URA.

The total development cost is slated at more than $3 million, he said, and the URA’s investment is earmarked to fund the acquisition of the property and a “light renovation” of some existing units and common spaces.

The structure was built in 1911 and saw rehabilitation projects in 2014 and 2020 that included installing new water heaters and furnaces and repairing the roof, Peyton said.

“It’s exciting to see preservation money already getting out,” URA Board Chair Kyle Chintalapalli said. “We knew there was going to be demand on this.”

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