Despite one woman's tearful testimony, a federal judge yesterday refused to halt the foreclosure sale of an East Hills subsidized housing development, slated to be demolished and redeveloped with new housing.

Several residents of Third East Hills Park -- a neighborhood of 140 two-story townhouses bordering Wilkinsburg and Penn Hills -- filed a lawsuit last week against the U.S. Department of Housing and Urban Development. In it, they claimed that HUD was violating the Fair Housing Act by foreclosing on the property and forcing the residents to relocate.

Yesterday, U.S. District Chief Judge Donetta W. Ambrose held a hearing on a preliminary injunction that would stop the sale of the property to the Urban Redevelopment Authority.

In announcing her decision to allow the sale to go through, Judge Ambrose said she recognized the residents were in a "sad" situation but that being forced to move does not cause irreparable harm -- one of the standards the plaintiffs had to meet to win an injunction.

The development, built in the early 1970s, is owned by a cooperative that was formed by residents in the mid-70s.

Under the co-op plan at Third East Hills, residents were able to become shareholders by paying a fee up front, and then contributing 30 percent of adjusted household income each month toward rent and utilities.

HUD holds the mortgage on the property and in 2004 found that the cooperative violated its contract with HUD by allowing the property to fall so far into disrepair that it was unsafe.

The property failed to pass federally required inspections five times in six years. Among the problems found during the inspections were roach infestations; mold and mildew on interior walls; unsafe water heaters; inoperable door locks and electrical outlets.

Throughout the years, the co-op had an on-site property manager to maintain the units, but over the last several years repairs weren't made, even when HUD provided more than $1 million to do so.

But Kevin Quisenberry, the plaintiffs' attorney, argued that it was HUD's responsibility to maintain the property if the co-op owners could not.

"It can't sit by and let a property rot," he said.

HUD should have stepped in to save the property in 1999, when conditions began deteriorating so severely. Instead, he told the judge, HUD allowed the property to be run into the ground.

"HUD has mandatory duties to take care of a property," Mr. Quisenberry said.

Dale Peoples, who has lived in Third East Hills since it was built, said she paid nearly $1,800 to buy into the co-op and she expected to get something back out of it.

"I didn't like the way they were doing this," she said. "They were trying to shift us out -- throw us away like a piece of garbage."

HUD plans to sell the property to the Urban Redevelopment Authority for $1, which will then sell it for a nominal fee to a redevelopment company. Their plan, with the assistance of millions of dollars in funding, is to build new, mixed-income housing on the property, as has already happened to adjacent Second East Hills Park.

Though HUD contends that the current residents will be able to move back into the new development, there will only be 40 rental units there and 35 rent-to-own units, Mr. Quisenberry said -- far fewer than the 140 that currently exist.

"Did they come in and tell you they have a place for YOU to come live in?" Mr. Quisenberry asked Ms. Peoples.

"No," she answered.

Residents in Third East Hills have been moving out since early last year with the help of housing vouchers from HUD and relocation assistance, and only two dozen units are still occupied.

By relocating the residents and tearing down the existing buildings, "URA and HUD is the knight in shining armor coming to save the property," said Gregory C. Melucci, who represented HUD in the lawsuit.

The existing Third East Hills Park is unsafe, he said, and HUD is looking out for the best interest of the residents by moving them.

"There's been a strong movement to revitalize the East Hills area, and this is one of the last steps in that," Mr. Melucci said.