Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968 that helps foster local economic development, neighborhood economic improvement, and individual self-sufficiency. Section 3 ensures that recipients of certain HUD financial assistance, to the greatest extent feasible, provide employment and other economic opportunities for low- and very-low income persons in connection with projects and activities in their neighborhoods and to business concerns which provide economic opportunities to low- and very-low income persons.
How does Section 3 promote self- sufficiency?
Section 3 is a starting point to obtain job training, employment and contracting opportunities. From this integral foundation coupled with other resources comes the opportunity for economic advancement and self-sufficiency.
- Federal, state and local programs
- Advocacy groups
- Community and faith-based organizations
How does Section 3 promote homeownership?
Section 3 is a starting point to homeownership. Once a Section 3 resident has obtained employment or contracting opportunities they have begun the first step to self-sufficiency.
Remember, “It doesn’t have to be fields of dreams”. Homeownership is achievable. For more information, visit our HUD website.
Who are Section 3 Residents?
A Section 3 Worker is any worker who currently fits, or when hired within the past five years fit, at least one of the below categories, as documented:
- A low or very low-income resident (Worker’s income for the previous or annualized calendar year is below the income limit established by HUD); or
- Employed by a Section 3 business concern; or
- A Youthbuild participant.
A Targeted Section 3 Worker is a Section 3 worker who:
- Is employed by a Section 3 business concern; or
- Currently fits or when hired fit at least one of the below categories as documented within the past five years:
- A resident of public housing or Section 8-assisted housing; or
- A resident of other public housing projects or Section 8-assisted housing managed by a PHA that is providing the assistance; or
- A Youthbuild participant.
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.
What is a Section 3 business concern?
A business that documented within the last six-month period is:
- 51% or more owned and controlled by low or very low-income persons; or
- 75% or more of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers; or
- 51% or more owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.
What programs are covered?
Section 3 applies to HUD-funded Public and Indian Housing assistance for development, operating, and modernization expenditures.
Section 3 also applies to certain HUD-funded Housing and Community Development projects that complete housing rehabilitation, housing construction, and other public construction.
What types of economic opportunities are available under Section 3?
- Job training
Any employment resulting from these expenditures, including administration, management, clerical support, and construction, is subject to compliance with Section 3.
Examples of Opportunities Include: