Section 3 is a provision of the federal Housing and Urban Development Act of 1968 that helps foster local economic development, job opportunities and self-sufficiency. The Section 3 Program ensures that “to the greatest extent feasible,” economic opportunities generated by certain HUD financial assistance be prioritized for low-income individuals and businesses. The program is implemented and regulated by Part 75 of Title 24 of the Code of Federal Regulations.

Recipients of HUD Community Development Block Grant fundings for disaster recovery or mitigation have a responsibility to ensure that all HUD-funded projects aim to maximize community benefits and economic opportunities for low-income individuals and households. 

Section 3 Requirements

Grant subrecipients, contractors and subcontractors working on Section 3-covered contracts or projects must make their best efforts to provide employment and training opportunities to Section 3 workers. These job opportunities may include professional, technical, construction, maintenance and administrative work. Certified Section 3 workers have the option of being placed on a registry to receive notification of employment and training opportunities. 

To obtain contracting opportunities on HUD Section 3-covered contracts and projects, a business must:

  • Be at least 51% owned and controlled by low-income individuals; or
  • Have Section 3 workers perform over 75% of the business’s labor hours over a three-month period; or
  • Be at least 51% owned and controlled by current public housing residents or Section 8 residents.

A business that is Section 3 Business Concern certified is placed on a registry and notified of contracting opportunities, business development workshops and conferences and referrals to businesses under Section 3 Contract Compliance.

To meet HUD benchmarks, subrecipients, developers, contractors and subcontractors working on Section 3 covered contracts and projects must make a documented effort to award contracts and subcontracts to qualified Section 3 Business Concerns and hire qualified Section 3 workers.

The HUD Section 3 Resource Hub offers detailed information for workers, businesses and HUD funding recipients.

Section 3 Outreach