This final rule implements executive branch policy that, within the framework of constitutional church-state guidelines, faith- based organizations should be able to compete on an equal footing with other organizations for Federal funding. Executive Order 13279, entitled "Equal Protection of the Laws for Faith-Based and Community Organizations," establishes fundamental principles and policymaking criteria to guide Federal agencies in formulating and developing policies that have implications for faith-based and community organizations to ensure the equal protection of the laws for these organizations in federally-assisted social service programs. Consistent with the Executive Order, this final rule describes HUD's policy for the participation of faith-based organizations in HUD programs and activities. In addition, this final rule makes a conforming amendment to regulations for the State Community Development Block Grant (CDBG) program regarding the equal participation of faith-based organizations in the program. The final rule follows publication on March 3, 2004, of a proposed rule and takes into consideration the public comments received on the proposed rule. After careful consideration of the public comments, HUD has decided to adopt the proposed rule without change.