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Section 3 Employment

What is Section 3?

Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968. 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, and consistent with existing Federal, State and local laws and regulations, be directed to low- and very low income persons, particularly those who are recipients of government assistance for housing, and to business concerns which provide economic opportunities to low- and very low-income persons.

HUD’s regulations implementing Section 3 are found at 24 CFR Part 135.

What is a Section 3 Business Concern?

Section 3 business concerns are businesses that can provide evidence that they meet one of the following criteria:

  • 51 percent or more owned by Section 3 residents; or
  • Employs Section 3 residents for at least 30 percent of its full-time permanent staff; or
  • Provides evidence of a commitment to subcontract in excess of 25 percent of the dollar award of all subcontracts to business concerns that meet one of the first two qualifications.