The Capital Area Transit System is one-third of the way to closing its $1.5 million budget deficit, which has threatened to shutter the parish bus system by the end of October.

The CATS Board of Directors approved a $500,000 grant from the East Baton Rouge Mortgage Finance Authority at its Tuesday meeting.

The Mortgage Finance Authority, a privately funded agency that provides affordable housing and economic development projects, also approved issuing the grant at its meeting the same day.

CATS Chief Executive Officer Brian Marshall said Mayor-President Kip Holden arranged the partnership.

The one-time grant will be changed into a loan to be paid back if CATS receives a dedicated source of funding within five years.

Marshall said the mayor is expected to elaborate on another grant secured for CATS at a press conference next week.