HUD Section 3

​​​ HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business.

Understanding Section 3

Section 3 is a HUD (US Department of Housing and Urban Development) requirement designed to ensure that HUD funds invested in housing and community development activities contribute to employment opportunities for low-income people living in or near the HUD-funded project.

HUD’s regulations state that “to the greatest extent feasible” businesses and employers working on HUD-funded projects must make a good faith effort to train and employ low-income individuals living in the local area (Section 3 worker) and also to contract with businesses owned by or that employ Section 3 workers (24 CFR 75.19).

HUD’s Section 3 regulations appear in the Code of Federal Regulations, at 24 CFR Part 75. These regulations describe the obligations of each party working on the project. Non-compliance with HUD’s regulations may result in remedies and sanctions by HUD. (24 CFR 75.33)

Does Section 3 pertain to my organization?

Section 3 pertains to all City of Bellingham programs accessing HUD Section 3-covered funds that allow any construction, demolition or rehab (HOME, CDBG and NSP)

The City of Bellingham sub-recipients (aka: Contract Administrators, Agencies, Developers, and Reservation System Participants) receiving funds covered by the HUD Section 3 rule (24 CFR 75) may interpret the following terms found in the rule as applicable to them: recipient, sub-recipient, and awardee. Any entity, other than the ultimate beneficiary household and direct hires, receiving Section 3 covered funds from a recipient, sub-recipient or awardee in exchange for providing goods or services, should adhere to the requirements for “contractors” and “subcontractors”.

HUD applies Section 3 obligations equally to The City of Bellingham and its sub-recipients except that the City reports directly to HUD; sub-recipients submit Section 3 reports to the City; and contractors submit Section 3 reports to the sub-recipients who issued them the contract. The Section 3 Report Responsibility Chain Diagram (PDF) graphically illustrates award recipients’ reporting obligations.

Affordable Housing Developers

Housing Developers that are working with the City on a Section 3 covered project must include Section 3 information with bid packages and contracts. The City has developed a Section 3 Contractor Action Plan to make this work easier.

Contractors for the City of Bellingham Home Rehabilitation Program

The City is always seeking qualifications from licensed, bonded, and insured general contractors experienced with the rehabilitation of single family (1-4 unit) homes. The Notice to Contractors webpage contains additional information.

Resources

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