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 toward 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. Section 3 is part of the Housing and Urban Development Act of 1968, as amended by Section 915 of the Housing and Community Development Act of 1992.
Section 3 Worker Means:
- Any worker who currently fits or when hired within the past five years fit at least one of the following categories, as documented:
- The worker's income for the previous or annualized calendar year is below the income limit established by HUD. The below table provides Section 3 household income limits, which are updated by HUD from time to time.
- The worker is employed by a Section 3 business concern.
- The worker is a YouthBuild participant.
- The status of a Section 3 worker shall not be negatively affected by a prior arrest or conviction.
- Nothing in this part shall be construed to require the employment of someone who meets this definition of a Section 3 worker. Section 3 workers are not exempt from meeting the qualifications of the position to be filled.
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Targeted Section 3 Worker Means:
Targeted Section 3 worker for housing and community development financial assistance means a Section 3 worker who is:
- A worker employed by a Section 3 business concern; or
- A worker who currently fits or when hired fit at least one of the following categories, as documented within the past five years:
- Living within the service area or the neighborhood of the project, as defined in § 75.5; or
- A YouthBuild participant.
Section 3 Business Concern Means:
- A business concern meeting at least one of the following criteria, documented within the last six-month period:
- It is at least 51 percent owned and controlled by low- or very low-income persons;
- Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers; or
- It is a business at least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.
- The status of a Section 3 business concern shall not be negatively affected by a prior arrest or conviction of its owner(s) or employees.
- Nothing in this part shall be construed to require the contracting or subcontracting of a Section 3 business concern. Section 3 business concerns are not exempt from meeting the specifications of the contract.
Who is subject to Section 3?
Section 3 requirements apply to construction and rehabilitation projects that receive HUD funding through the DuPage County Community Development Commission (CDC) when the total amount of assistance to the project exceeds a threshold of $200,000. Any sub-grantee/developer, contractor and/or subcontractor working on the HUD assisted project is subject to Section 3.
Contractors working on projects receiving $200,000 or less are not responsible for complying with Section 3; however, it is encouraged that any contractor or new hire which qualifies as Section 3 be documented and reported to meet the numerical objectives as a whole.
What are Section 3 Requirements?
To the greatest extent feasible, all subgrantees/developers, contractors and subcontractors working on Section 3 covered projects must document their efforts to meet the following numerical Section 3 goals:
- Twenty-five percent (25%) or more of the total number of labor hours worked by all workers on a Section 3 project are Section 3 works. Section 3 Labor Hours / Total Labor Hours = 25%.
- Five percent (5%) or more of the total number of labor hours worked by all workers on a Section 3 project are Targeted Section 3 workers. Targeted Section 3 Labor Hours / Total Labor Hours = 5%.
Section 3 Certification
Why should an individual or business become certified as Section 3? The DuPage County Community Development Commission (CDC) maintains lists of certified Section 3 individuals and certified Section 3 businesses. Any entity receiving federal funding through CDC for a construction project will be required to solicit bids and/or new hires from these lists.
Section 3 Forms
DuPage County CDC staff has prepared the following forms to aid in certification of business concerns and workers as Section 3. Below are the fillable PDF files that allow you to save your changes before printing. You may download each form individually as applicable.
FILLABLE PACKET FOR CONTRACTORS EFFECTIVE 05/15/2023:
- Section 3 - Acknowledgement of Compliance Requirements 05-15-2023(PDF Fillable)
- Section 3 - Compliance Certification (PDF Fillable)
- Section 3 - Business Self-Certification Form 05-15-2023(PDF Fillable)
- Section 3 - Laborer Self-Certification Form 05-15-2023(PDF Fillable)
Upon completion please return the forms to CDC office via mail, fax or email. If you have any additional questions about Section 3 please email email@example.com or phone/fax: 630-407-6600 / 630-407-6601.
DuPage Community Development Commission
421 N. County Farm Road, Room 2-800
Wheaton, IL 60187
Section 3 Business Registry
The Section 3 Business Registry is a registry of businesses that have self-certified their status as Section 3 Businesses. Businesses who self-certify that they meet one of the regulatory definitions of a Section 3 business will be included in a searchable online database. The database can be used by agencies that receive HUD funds, developers, contractors, and others to facilitate the award of covered construction and non-construction contracts to Section 3 businesses. Section 3 residents are also encouraged to use the registry to identify businesses that may have HUD-funded employment opportunities.
The DuPage County Community Development Commission requires notice of bid opportunities be sent directly to any appropriate contractor identified on the Section 3 Business Registry for projects partially assisted with federal funds allocated to DuPage County through the U.S. Department of Housing & Urban Development. A link to HUD’s Section 3 Business Registry for the Chicago-Joliet-Naperville, IL HUD Metro Metropolitan Area can be found here: Section 3 Business Registry
Other Section 3 Outreach Efforts
In addition to the contractor documentation that has been developed, CDC staff have created additional educational material pertaining to Section 3. Please review the below for additional information.