Program overview
Section 3 is part of the Housing and Urban Development (HUD) Act of 1968. It promotes local economic development and individual self-sufficiency. The Section 3 program is race and gender neutral. Qualification for Section 3 is based only on:
- personal income; and
- living in the area or neighborhood of the construction project.
Requirements
Section 3 may apply to housing construction projects that get money from the U.S. Department of Housing and Urban Development (HUD).
If you receive Section 3 funding for a project, you must provide eligible local residents:
- opportunities for employment,
- job training, and
- help finding employment.
Section 3 Worker labor goal
Section 3 Workers should perform 25% of all labor hours. Of that 25%, Targeted Section 3 Workers should perform 5% of all labor hours. The 5% goal will count towards the 25% Section 3 Worker goal.
To be a "Section 3 Worker,” a person must be one of the following:
- Employed by a Section 3 business concern.
- A YouthBuild participant.
- The worker's gross income is below the income limit established each year by HUD. Review HUD income limits.
- HUD establishes low-income limits, and very low-income limits. HUD says that a worker is:
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- Low income if they earn 80 percent of the median individual income in the area.
- Very low-income if they earn 50 percent of the median individual income in the area.
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- HUD establishes low-income limits, and very low-income limits. HUD says that a worker is:
To be a "Targeted Section 3 Worker," a person must be one of the following:
- Employed by a Section 3 business concern.
- A YouthBuild participant within the past five years.
- Living in the area or neighborhood of the project (documented within the past five years).
- Living in public housing, or Section 8-assisted housing within the past five years. This includes living in housing managed by a Public Housing Agency that is providing money for the project.
Section 3 businesses
There are no Section 3 business requirements or goals. If you get Section 3 money, we encourage you to invite, and contract with, Section 3 businesses to work on your project.
The HUD Section 3 program calls Section 3 businesses a "Section 3 Business Concern." To be a Section 3 Business Concern, a business must be one of the following (documented within the last 6 months):
- It is at least 51% owned and controlled by low- or very low-income persons.
- Section 3 workers performed over 75% of the labor hours for the business (over the last three months).
- It is at least 51% owned and controlled by residents who now live in public housing or Section 8-assisted housing.