WASHINGTON -- The U.S. Department of Transportation on Wednesday announced a $537.1 million loan to help improve Penn Station, where repairs this summer are forcing NJ Transit trains to be rerouted.

The loan will go to the New York State Urban Development Corp. for construction at the station, which handles more than two-thirds of all train trips along the Northeast Corridor.

Transportation Secretary Elaine Chao said the money will help fund "a modern, state-of-the-art train station, delivering extensive improvements for passengers in easing congestion and delays."

A number of train derailments at the station earlier this year snarled train traffic and forced Amtrak to repair and replace tracks this summer.

The work will force passengers on New Jersey Transit's Morris and Essex Midtown Direct trains to disembark in Hoboken and finish their trip to New York on PATH trains or ferries at no extra cost. Riders will get fare reductions of up to 63 percent for their inconvenience.

Under the $1.9 billion project, Amtrak arrivals and departures will be shifted to a new Moynihan train hall in the James A. Farley Post Office Building across from the existing Penn Station. It is scheduled to be completed in December 2020.

A separate Gateway project, consisting of two new rail tunnels under the Hudson River and a new Portal Bridge over the Hackensack River, still awaits federal funding. President Donald Trump's proposed budget made the project ineligible for a Transportation Department program that was expected to be a major source of federal dollars.

Jonathan D. Salant may be reached at jsalant@njadvancemedia.com. Follow him on Twitter @JDSalant or on Facebook. Find NJ.com Politics on Facebook.