BUSH PLAN WOULD ALLOW RELIGIOUS GROUPS USE OF U.S. HOUSING MONEY.(MAIN)

Byline: ERIC LICHTBLAU New York Times

WASHINGTON -- The Bush administration is planning to allow religious groups for the first time to use federal housing money to help build centers where religious worship is held, as long as part of the building is also used for social services.

The policy shift, which was made in a rule that the Department of Housing and Urban Development proposed this month, significantly expands the administration's contentious faith-based initiative.

Current regulations generally prohibit religious groups from using federal housing and community development grants for building or rehabilitating structures. The new rules, still …