This interim rule establishes regulations to implement a statutory change moving Community Development Block Grant (CDBG) program assistance for insular areas from section 107 (Special Purpose Grants) to section 106 (Allocation and Distribution of Funds) of the Housing and Community Development Act of 1974. As in the past under the Special Purpose Grant program, HUD will continue to make grants to insular area jurisdictions under the Insular Areas CDBG program for activities which principally benefit low- and moderate-income persons, aid in the elimination of slums or blighting conditions, or meet other community development needs having a particular urgency. This interim rule codifies the amended statutory funding mechanism for allocation of CDBG funds to insular areas, includes the Insular Areas CDBG program in subpart F and streamlines that subpart by removing sections no longer necessary for the Small Cities CDBG program, identifies the process by which insular areas will receive and report on grant funds under section 106, enables insular areas to apply for the Section 108 Loan Guarantee program, and makes other conforming and technical amendments.