HUD Section 3
Any entity within the state of Utah which receives and distributes HUD funds (e.g. HOME, CDBG, HOPWA, CRG, etc.) is required by law to promote Section 3 of the Housing and Urban Development Act of 1968.
Section 3 of the Housing and Urban Development Act of 1968 requires projects funded by the department of Housing and Urban Development to meet “to the greatest extent feasible” specific goals for contracting, hiring, and training low-income individuals to work on these projects.
Section 3 FAQs
What projects carry Section 3 obligations?
All Contractors or subcontractors that receive HUD funded contracts in excess of $200,000 for housing construction, rehabilitation or other public construction are required to comply with the requirements of Section 3.
When is Section 3 triggered?
Section 3 is triggered when the normal completion of construction and rehabilitation projects created the need for new employment, contracting, or training opportunities
Who qualifies as a Section 3 business?
There are two ways in which a business can become a Section 3 business.
If the business is majority (51%) owned by low income (<80% Area Median Income) individuals it is a Section 3 business or,
If 30% of the workforce is currently low income or were low income within the last three years.
*A business is only considered a section 3 business within the MSA or county in which it is located.
*To find the 80 percent area median income threshold in your area go to:
Why should I become a Section 3 business?
Section 3 businesses may receive preferential consideration in the process for soliciting government contracts in which HUD funds are involved.
How do I recruit Section 3 residents?
HUD funds recipients are required to promote employment and training opportunities for low income individuals. This responsibility includes but may not be necessarily limited to:
Notify Section 3 residents about the availability of training and/or employment opportunities. (E.g. distribute flyers and post signs at job site, Place ads in local newspapers)
Notify Section 3 business concerns about the availability of contracting opportunities
Notify any potential contractors for Section 3 covered projects about the requirements of Section 3
Incorporating the Section 3 clause into all solicitations and contracts
Facilitating the training and employment of Section 3 residents
Facilitating the award of contract to Section 3 business concerns
Providing preference in contracting to Section 3 business concerns
Documenting actions taken to comply with the requirements of Section 3, along with the results of any actions taken and any impediments encountered