Section 3 and HUD-Funded 

Contracts

potentially misrepresented themselves. In such 

situations, HUD will request documentation to 

verify the businesses’ eligibility. Businesses that 

are found to have misrepresented themselves will 

be removed from the Section 3 Business Registry 

and penalized (see HUD’s Section 3 Business 

Registry webpage for more information).

To search for Section 3 businesses in your 

community, register your business, or learn more 

about HUD’s Section 3 Business Registry, please 

visit: www.hud.gov/Sec3biz

Section 3 and HUD-Funded 

Contracts

Section 3 requirements provide preference but not 

a guarantee to Section 3 residents and Section 3 

businesses when new jobs, training, or contracting 

opportunities are created as a result of HUD funds. 

Section 3 residents and businesses are not entitled 

to jobs or contracts simply because they meet 

the eligibility criteria. Section 3 residents and 

businesses may need to demonstrate that they 

have the ability to perform successfully under the 

terms and conditions of proposed contracts and 

meet the qualifications for jobs or contracts they 

are seeking.

Section 3 residents or businesses that believe that 

they have been denied employment, training, or 

contracting opportunities associated with HUDfunded projects are encouraged to file a complaint 

with HUD at the appropriate Regional Office of Fair 

Housing and Equal Opportunity (FHEO). A copy of 

the Section 3 Complaint Form (HUD-958) and a list 

of FHEO Regional Offices can be found online at: 

www.hud.gov/Section3

U.S. Department of Housing and Urban Development

www.hud.gov/Section3 HUD Form 972-English
What Is Section 3?

What Is A Section 3 

Business?

Who are Section 3 

Residents?

What is the Section 3 

Business Registry?

What Is Section 3?

Section 3 is a provision of the Housing and Urban 

Development (HUD) Act of 1968 that helps foster 

local economic development, neighborhood 

improvement, and individual self-sufficiency.

HUD investments in local communities represent 

one of the largest sources of federal funding, 

and the expenditure of these funds typically 

results in new contracts and jobs. The Section 

3 requirements stipulate that local low-income 

persons, and businesses that substantially employ 

those persons, receive priority consideration for 

a percentage of new training, employment, and 

contracting opportunities that are created from 

certain HUD funds.

Please visit www.hud.gov/section3 for more 

information on the requirements of Section 3.

What Is A Section 3 

Business?

If your business meets one of the 

following criteria, you may be eligible 

to receive priority consideration 

when bidding on certain HUD-funded 

contracts or subcontracts:

1) 51 percent or more owned by Section 3 

residents; or 

2) At least 30 percent of full-time, permanent 

staff are Section 3 residents (or were Section 3 

residents within the last 3 years); or 

3) Evidence of a commitment to subcontract 25 

percent or more of the total dollar amount 

of all subcontracts to businesses that meet 

one of the criteria listed above.

Who are Section 3 

Residents?

If you meet one of the following criteria, 

you may be eligible to receive priority 

consideration when applying for 

certain HUD-funded jobs and training 

opportunities:

1) Public housing residents; or

2) Low and very low-income persons who live in 

the metropolitan area or Non-metropolitan 

County where covered HUD funding is spent.

To determine income eligibility in your 

community visit: http://www.huduser.org/

portal/datasets/il.html

What is the Section 3 

Business Registry?

The Section 3 Business Registry is a 

listing of businesses that have 

self-certified that they meet one of 

the eligibility criteria of a Section 

3 business, and have submitted 

publicly available information 

about their firm (i.e. business 

name, address, type of 

services provided, etc.) to 

be included HUD’s online 

database.

The Section 3 Business Registry will be used 

by Public Housing Authorities (PHAs); State, 

County, and local government agencies; property 

owners; developers; contractors; and others as 

a resource for finding local Section 3 businesses 

to be notified about HUD-funded contracting 

opportunities. Section 3 residents are also 

encouraged to use the registry to locate Section 

3 businesses that may have new HUD-funded 

jobs as a result of recently awarded HUD-funded 

contracts.

HUD will maintain the Section 3 Business 

Registry to assist agencies that receive HUD 

funds with meeting their Section 3 obligations. 

However, HUD does not verify information 

submitted by businesses and does not endorse 

the services they provide. Therefore, grantees 

and other users should perform due diligence to 

confirm eligibility before awarding contracts to 

firms in the Section 3 Business Registry.

Contact HUD at sec3biz@hud.gov if you believe 

firms in HUD’s Section 3 Business Registry have

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