WBRZ - Baton Rouge

NEW ORLEANS - New Orleans Mayor Mitch Landrieu has announced federal mortgage insurance approval that will allow construction to begin on a full-service hospital in eastern New Orleans - one of the areas devastated by flooding in 2005 when levees failed during Hurricane Katrina.

Landrieu's office said Monday that the U.S. Department of Housing and Urban Development made a commitment to insure a $97.6 million loan for the hospital. His office said the project, valued at a total of $130 million, will restore full-service health care to residents in New Orleans East.

The new hospital is planned for the site of the former Pendleton Memorial Methodist Hospital.