Section 3 Guidebook

Collage of Section 3 images

Welcome to the Section 3 Guidebook!

This Guidebook curates the latest guidance, tools, and resources for implementing and applying Section 3 to HUD funded projects and activities.

Section 3 is a provision of the Housing and Urban Development Act of 1968 whose purpose 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.

This resource will help HUD grant recipients and sub-recipients, contractors, and Section 3 businesses who manage or implement Section 3 provisions. It complements the Section 3 Rule and Benchmarks Notice and has been updated with guidance from HUD’s Office of Field Policy and Management (FPM) Regional Points of Contact (POCs) to ensure the content is current and consistent with Section 3 requirements.

How to Use this Guidebook

This Guidebook informs users on how to implement the requirements of the new Section 3 final rule, as well as specific application as it relates to different professional and construction services and how it is applied within different HUD program offices.

The Guidebook begins with the evolution of Section 3 and recognizes key differences between the Section 3 former rule and the new final rule but expands to provide more general information on how to apply Section 3 in the field, compliance, complaints, and best practices.


Compliance with Section 3 Required by Direct Recipients of HUD Funding

This Guidebook provides guidance and resource materials to help direct recipients of HUD funding comply with Section 3 of the Housing and Urban Development Act of 1968. Direct recipients include:

  • Public Housing Agencies (PHAs) that manage low-rent units
  • Entitlement jurisdictions and states that receive annual formula grants and special allocations such as:
    • Community Development Block Grant (CDBG)
    • HOME Investment Partnerships Program (HOME)
    • Housing Trust Fund (HTF)
    • Emergency Solutions Grant (ESG)
    • Housing Opportunities for Persons With Aids (HOPWA) Program
  • Jurisdictions and insular areas that receive assistance for disaster recovery
  • Owners of projects converted under HUD’s Rental Assistance Demonstration (RAD) that undertake capital improvements
  • Lead abatement and other HUD Notice of Funding Availability (NOFA) Grantees