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An introduction to HUD's Section 3 program

An increasing number of public contracts have Section 3 participation requirements, but many companies that do business with the government are unfamiliar with the program. Here, we answer the most common questions we receive related to Section 3. 

What is Section 3? 
Section 3 is a federal Housing and Urban Development (HUD) program that aims to help public housing residents or a low- to very low-income persons participate on contracts that receive HUD funding. 

What qualifies a firm as a Section 3 business? 
A company is classified a Section 3 business if it is 51% owned by a Section 3 resident or residents; 30% of a firm's full-time staff is comprised of Section 3 residents; or if a company provides evidence of its intent to subcontract 25 percent of a contract's dollar award to Section 3 businesses. 

Can my business be included in a Section 3 directory? 
HUD allows businesses to apply for Section 3 business self-certification on its website. If the application is approved, your business will be listed in HUD's Section 3 Business Registry. Local recipients of HUD funding may also maintain their own lists.

I am a prime contractor, what type of outreach do I need to perform to comply with Section 3 requirements? 
Local recipients of HUD funding have significant leeway when it comes to implementing the federal Section 3 guidelines, though the necssary outreach steps are similar to those required for contracts with DBE goals. For instance, the City of Long Beach Section 3 rules mandate that bidders advertise opportunities prior to the contract's bid date, send written invitations to bid to eligible firms, contact local organizations for assistance, and follow up on those invitations. For guidance, it is best to contact the awarding agency or local HUD office. 

My contract has Section 3 requirements. Where can I find a list of Section 3 businesses in my area? 
You can try searching HUD's online Section 3 Business Registry, but when we recently attempted to access it we received an error page. There is another Section 3 Business Registry available on the HUD website here, but the search options are limited. Some local governments, such as Kern County and the City of Long Beach, maintain their own Section 3 business lists. You local HUD office may be able to point you in the direction of a Section 3 list as well.