Section 3

What is Section 3?

Section 3 is a provision of the Housing and Urban Development Act of 1968 (HUD Act). The purpose of Section 3 is to ensure that employment, and other economic opportunities generated by certain financial assistance provided by the Department of Housing and Urban Development (HUD), to the greatest extent feasible and consistent with existing Federal, State and local laws and regulations, shall 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.

How are HUD income limits determined?

Low-and very-low-household income limits are determined annually by HUD. These limits are typically established at 80% and 50% of the median income for each locality by household size or the number of people residing in one house. 

To see income limits for all areas in Puerto Rico for 2019, as determined by HUD to be used for the CDBG-DR funds allocated for Hurricanes Irma & María, visit Puerto Rico Income Limits.

What does the term “Section 3 resident” mean? 

A “Section 3 resident” is: 

  1. A public housing resident; or 
  2. A low- or very low- income person residing in the metropolitan area or non-metropolitan county where the Section 3 covered assistance is expended.

What does the term “Section 3 business” mean?

A “Section 3 business” is: 

  1. 51% or more owned by Section 3 residents; 
  2. 2. Employs Section 3 residents for at least 30% of its full-time, permanent staff; or 
  3. Provides evidence of a commitment to subcontract to Section 3 business concerns, 25% or more of the dollar amount of the awarded contract.

What is the Section 3 Business Registry?

The Section 3 Business Registry is a listing of firms that have self-certified that they meet one of the regulatory definitions of a Section 3 business and are included in a searchable online database that can be used by agencies that receive HUD funds, developers, contractors, and others to facilitate the award of certain HUD-funded contracts. The database can also be used by Section 3 residents to identify businesses that may have HUD-funded employment opportunities. 

You can access the Section 3 Business Registry database to find Section 3 businesses in your community, register your business, amend information, and/or learn about the Registry by visiting https://portalapps.hud.gov/Sec3BusReg/BRegistry/What.

What can I do about violations of the HUD Act?

Remember, Section 3 applies to the awarding of jobs, training programs, and contracts, generated from projects receiving HUD financial assistance. 

If you believe that, as a low-income person or a Section 3 business concern, the responsibilities to provide economic opportunities under Section 3 have been violated, you have a right to file a complaint within 180 days of the last alleged occurrences of noncompliance.

Complaints alleging violations of the Section 3 regulatory requirements must be submitted to the HUD Regional Office of Fair Housing and Equal Opportunity where the alleged violation took place by filling our Form 958. Please be certain to sign and date this form, where indicated, to ensure prompt complaint processing.

Click here to access Form 958.

HUD will send the complaint to the appropriate HUD recipient for resolution. If resolution by the recipient fails, HUD will investigate. If HUD finds that the complaint has merit, it will try to end the violation by informal resolution. If conciliation fails, HUD may initiate other steps to enforce the law, including but not limited to suspension and debarment of the recipient or contractors as applicable.

Where can I find more information about Section 3?

You can obtain assistance in learning about more Section 3 by visiting www.hud.gov/section3 or by contacting one of the HUD’s Regional Offices of Fair Housing and Equal Opportunity. For more information on the HUD’s Regional Offices of Fair Housing and Equal Opportunity, please visit https://www.hud.gov/localoffices/regions.

Which Regional Office of Fair Housing and Equal Opportunity covers Puerto Rico?

The Atlanta Regional Office, IV Region, covers the following states: Alabama, Puerto Rico, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and the Virgin Islands. For more information on the HUD’s Regional Offices of Fair Housing and Equal Opportunity, please visit https://www.hud.gov/localoffices/regions.

For more information on HUD’s Field Local Office, located in San Juan, Puerto Rico, visit https://www.hud.gov/states/puerto_rico_virgin_islands.

How can I find recipients or agencies that are required to provide preferences to Section 3 residents and businesses in my area?

To find local recipients of Section 3 covered funding, contact your local HUD office. To find your closest office, visit www.hud.gov/localoffices. For more information on HUD’s Field Local Office, located in San Juan, Puerto Rico, visit https://www.hud.gov/states/puerto_rico_virgin_islands.