HUD Section 3

Some housing projects can get funds from Housing and Urban Development. These funds come with requirements to include local low-income workers on the project.

Overview

Section 3 is part of the Housing and Urban Development (HUD) Act. It promotes local economic development and individual self-sufficiency. It is race and gender neutral.

If a business receives Section 3 HUD funding for a project, it must provide eligible local resident workers:

  • Job training
  • Opportunities for employment
  • Help finding employment

 

Two people reading a report.

Eligibility

Qualifications for Section 3 businesses are based on the percent of:

  • The business owned by Section 3 residents.
  • Labor hours performed for the business by Section 3 workers over the last three months.

Get the Section 3 Business application

Qualifications for Section 3 resident workers are based on: 

  • Family size and income
  • Where they live
  • Public assistance

Get the Section 3 Resident worker application

HUD Section 3 workers

There are two types of a HUD Section 3 worker. They are a Section 3 worker and a Targeted Section 3 worker.

Resident workers

Qualified residents may apply to work on Section 3 projects.

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.  

Section 3 workers

To be a "Section 3 worker,” a person must be one of the following:  

  • Employed by a Section 3 business concern.
  • Be a YouthBuild participant within the past five years.
  • Have a gross income below the income limit established each year by HUD.

HUD income limits

HUD establishes low-income limits, and very low-income limits. HUD says that a worker is:

  • 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.

Review HUD income limits

Targeted Section 3 workers

To be a "Section 3 worker,” a person must be one of the following:  

    • Employed by a Section 3 business concern.
    • Be a YouthBuild participant within the past five years.
    • Live in the area of the project with the past five years
    • Live in public housing or Section 8-assisted housing within the past five years.

 

HUD Section 3 businesses

HUD calls Section 3 businesses a Section 3 business concern.

Business

There are no Section 3 business inclusion requirements or goals. If you get Section 3 money, we encourage you to contract with Section 3 businesses for your project work.

HUD 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. 

Contact us

Johnnie Burns

Associate Director

Contract Compliance Division

Phone

612-673-3012

Address

City Hall
350 Fifth St. S.
Room 239
Minneapolis, MN 55415

Office hours
8:30 a.m. – 4:30 p.m.
Monday – Friday