State health officials have approved a new 44-bed hospital in Neshoba County.
Plans call for the new hospital to be completed in 2012.
The new facility would replace the present 82-bed hospital and be constructed near the existing location in Philadelphia.
Local officials are trying to get a $35.5 million loan from the Department of Housing and Urban Development to go with $18.1 million from the hospital's cash reserves.
The new hospital would be designed to support a third floor for future expansion.
Board of Supervisors President Obbie Riley says local officials hope to hear from HUD by the end of year.
The current hospital, which was built in 1963, to continue to house dietary to service the nursing home; laundry and linen; and administrative offices.