Section 3 

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Each year the U.S. Department of Housing and Urban Development invests billions of federal dollars into distressed communities for projects that build and rehabilitate housing; improve roads and community centers; and help families achieve the American Dream.

The Section 3 regulation acknowledges that HUD funding typically results in projects/activities that generate new contracting, employment, and other economic opportunities that not only impact bricks and mortar, but also create a multiplier effect for local housing providers and businesses that provide goods and services.

Section 3 of the Housing and Urban Development Act of 1968 [12 U.S.C. 1701u and 24 CFR Part 135] represents HUD’s policy for providing preference for new employment, training, and contracting opportunities created from the usage of covered HUD funds to low- and very low-income residents of the community where certain funds are spent (regardless of race or gender), and the businesses that substantially employ these persons.

All Waukesha County HOME, CDBG, or HOME ARP grant recipients in excess of $200,000 in grant funds  for project involving construction must adhere to Section 3 Labor Hour tracking and meeting required benchmarks or provide documentation of Qualitiative Efforts taken to support Section 3 Residents and Business Concerns.  

For housing and community development financial assistance projects, the benchmark for Section 3 workers is set at 25 percent or more of the total number of labor hours worked by all workers on a Section 3 project. The benchmark for Targeted Section 3 workers is set at 5 percent or more of the total number of labor hours worked by all workers on a Section 3 project. This means that the 5 percent is included as part of the 25 percent threshold.

Section 3 applies to projects that are fully or partially funded with HUD financial assistance. Projects that are financed with state, local or private matching or leveraged funds used in conjunction with HUD funds are covered by Section 3 if the amount of HUD funding for the project exceeds the regulatory thresholds (over $200,000).

Links to HUD Section 3 Website: 

Section 3 Opportunity Portal - Home (hud.gov)  Use to register as or locate Section 3 Workers, register as or locate Section 3 Business concerns, locate Section 3 job opportunities.  

Section 3 - HUD Exchange  Use for HUD Section 3 Resource and Section 3 Training Information 

Contractors are required to makes efforts to the greatest extent possible to work with Section 3 Residents and Section 3 Business Concerns. 

Laws and Regulations:

• Statute: Section 3 of the Housing and Urban Development Act of 1968, as amended by the Housing and Community Development Act of 1992 (12 U.S.C § 1701u):
• Final Rule: Enhancing and Streamlining the Implementation of Section 3 Requirements for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses:
• Benchmark Notice: Section 3 Benchmarks for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses.

Reporting Section 3 Forms: 

Community Development requires monthly reporting during construction and a final report. 

Qualitiative Efforts Form 
Section 3 Worker Self-Certification Form 
Section 3 Monthly Reporting and Worksheet Form  
Section 3 Business Concern Self-Certification Form  
Section 3 Rolling Monthly Reporting and Worksheet Form for Annual Tracking