CHHS

Section 3 Resources

What is Section 3?

Section 3 is a means by which HUD fosters local economic development, neighborhood economic improvement, and individual self-sufficiency. Section 3 is the legal basis for providing jobs for residents and awarding contracts to businesses in areas receiving certain types of HUD financial assistance.

Under Section 3 of the HUD Act of 1968, wherever HUD financial assistance is expended for housing or community development, to the greatest extent feasible, economic opportunities will be given to Section 3 residents and businesses in that area.

Section 3 Policy

Congress established the Section 3 policy to guarantee that the employment and other economic opportunities created by Federal financial assistance for housing and community development programs should, if possible, be directed toward low- and very-low income persons, particularly those who are recipients of government assistance for housing.

Who are Section 3 Residents?

Section 3 residents are:

Public housing residents
Low and very-low income persons who live in the metropolitan area or non-metropolitan county where a HUD-assisted project for housing or community development is located.

Determining Income Levels:

Low income is defined as 80% or below the median income of that area.
Very low income is defined as 50% or below the median income of that area.
Median incomes can be found using the American Fact Finder.

What is a Section 3 Business?

That is at least 51 percent or more owned by Section 3 residents,
Whose permanent, full-time employees include persons, at least 30 percent of whom are currently Section 3 residents, or within three years of the date of first employment with the business concern were Section 3 residents, or
That provides evidence of a commitment to subcontract in excess of 25 percent of the dollar award of all subcontracts to be awarded to a Section 3 business concern.

Registration

Registering as a Certified Section 3 Business Concern or a Certified Section 3 Worker may be helpful for low-income businesses to gain federal construction contracts and assist low-income workers with hiring preference, when new hires are needed for federal construction projects. Subrecipients and Contractors receiving federal funds that meet certain thresholds will be required to comply with Section 3.

There are no fees for registering or being certified.

Businesses can register, and recipients, contractors, and those looking for work can find Section 3 businesses by using HUD’s Section 3 Opportunity Portal.
In addition to Registration to certify Section 3 Status, all contractors submitting bids for federal prevailing wage projects must be registered with SAM.gov prior to bidding or doing any work on site. Register on SAM.gov.
Additional information on Section 3 may be found on HUD’s Section 3 webpage.