Section 3

Section 3 (24 CFR Part 75)

Section 3 is a provision of the Housing and Urban Development Act of 1968 -12 U.S.C. 1701u.

Purpose of Section 3

“The purpose of Section 3 is to ensure that employment and other economic opportunities generated by certain HUD financial assistance shall, to the greatest extent feasible, be directed to low- and very low-income individuals.”

-SEC3BIZFAQ.PDF (hud.gov)

Through our Section 3 program, HACH has been able to engage with low-income residents and provide them with various opportunities ranging from trainings, apprenticeship programs, job opportunities, and much more. HACH has also been able to help low-income businesses certify as Section 3 businesses to increase visibility and contracting opportunities.

All HUD funded projects and services are subject to Section 3 requirements and reporting by contractors and their subcontractors unless the service provided is a commodity or if it requires an advanced degree or specialized certification.

There are four ways to fulfil the Section 3 requirements:

1. Section 3 Business
   1. If your business meets any of the qualifications below, then your business is considered a Section 3 Business, and you will be fully in compliance.
      1. At least 51 percent of the business has to be owned and controlled by low-income individuals… or;
      2. At least 51 percent of the businesses is owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing. or;
      3. Over 75 percent of the labor hours performed for the business are performed by Section 3 or low-income workers.

2. Numerical Benchmarks
   1. 25% of the labor hours to be performed by Section 3 workers.
      1. A Section 3 worker is an individual making under the single person income limit determined by the city where they reside. For example, for 2023, in Hartford, the single income limit was about $65k/annually, so any individual making under $65k would be considered a Section 3 Worker. So, if you have 4 workers working on the project and 1 of them makes under $65k then you meet the benchmarks and are fully in compliance.
   2. Subcontracting
      1. A business can meet the numerical benchmarks through their subcontractors, if applicable.
   3. Best Efforts
      1. A list of Section 3 activities a business can perform to fulfil the responsibilities (only required to choose one)
         1. These activities range from outreach to info sessions, publicized job opportunities, and many more.
         2. HACH also allows businesses to come up with their own Section 3 activity (if it is approved by HACH) to fulfil the requirements.

Please contact Larry Johnson at ljohnson@hartfordhousing.org for any Section 3 related questions.

Forms and Documents