What is Section 3:

Section 3 is a provision of the Housing and Urban Development 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.

A Section 3 business concern is a business that meets at least one of the following criteria, documented within the last six-month period:

• At least 51 percent of the business is owned and controlled by low- or very low-income persons; or
• At least 51 percent of the business is owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing; or
• Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers.
  
  

Please review HUD's Section 3 program page for full details: https://www.hudexchange.info/programs/section-3/

Section 3 Worker Definition:

• A low or very low-income resident (the worker’s income for the previous or annualized calendar year is below the income limit established by HUD); or
• Employed by a Section 3 business concern; or
• A YouthBuild participant.

Targeted Section 3 Worker Definition:

• Employed by a Section 3 business concern or
• Currently meets or when hired met at least one of the following categories as documented within the past five years:
• A resident of public housing; or
• A resident of other public housing projects or Section 8-assisted housing; or
• A YouthBuild participant.

How are low-income and very low-income determined?

• Low- and very low-income limits are defined in Section 3(b)(2) of the Housing Act of 1937 and are determined annually by HUD. These limits are typically established at 80 percent and 50 percent of the area median individual income. HUD income limits may be obtained from:
  https://www.huduser.gov/portal/datasets/il.html