This final rule amends the Community Development Block Grant (CDBG) Entitlement program regulations by requiring grantees to obtain HUD's approval to demolish HUD-owned housing units. The amendment will ensure that HUD receives notification of a grantee's intent to use CDBG funds to demolish HUD-owned housing units. In addition, the application of this rule will aid in preserving the supply of affordable housing that is available to low- and moderate-income persons. This final rule follows publication of a proposed rule on January 22, 2002, which elicited one comment. The one comment supported the rule, which HUD is adopting without change.