Section 3 is a provision that applies to projects with HUD financial assistance and requires that employment and other economic opportunities be directed to economically disadvantaged persons to the greatest extent feasible.
Projects for which assistance or funds are committed after July 1, 2021 are subject to the new Section 3 regulations including a goal of 25% of total project hours to be performed by Section 3 Workers and 5% of the total project hours are performed by Section 3 Targeted Workers.
Previously, Section 3 percentages were based on new hires and were calculated by the number of Section 3 employees rather than hours worked.
The goal for Section 3 businesses was replaced with incentivizing contracting with Section 3 businesses by counting all hours worked by Section 3 Business employees as Targeted Section 3 hours.
There are slightly different definitions for Section 3 Targeted Workers depending on if the project is a Housing and Community Development Financial Assistance or Public Housing Financial Assistance projects