Section 3 F.A.Q. Released

On March 25, HUD published a Frequently Asked Questions (F.A.Q.) on Section 3. HUD’s “Enhancing and Streamlining the Implementation of Section 3 Requirements for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses” final rule was published on September 29 in the Federal Register. The rule updates Section 3 regulations and reporting requirements and clarifies the obligations of entities that are covered by Section 3. PHAs have until July 1, 2021 to implement their Section 3 activities pursuant to the rule and comply with new reporting requirements.

The final rule includes separate requirements for Public Housing Section 3 projects and Section 3 projects that use other HUD program assistance for housing rehabilitation, housing construction, and other public housing construction projects. All PHAs that receive funding for public housing are required to report on Section 3, however, agencies with fewer than 250 units are only required to report on qualitative efforts to meet Section 3 requirements and are not required to report on whether they have met specific Section 3 outcome benchmarks or not. Generally, any housing rehabilitation, housing construction, or other public construction projects that uses other HUD program assistance that exceeds a $200,000 threshold or any project that receives funding from HUD’s Lead Hazard Control and Healthy Homes programs, is required to report Section 3 activities to HUD. Section 8 program activities are excluded from the rule.

HUD’s F.A.Q. provides guidance for Section 3 funding recipients, subrecipients, contractors, subcontractors, workers, and other stakeholders. The F.A.Q. lacks the force and effect of binding law. The F.A.Q. is broken up into seven sections. The sections include general questions regarding Section 3, applicability, consistency with other laws, recipient responsibilities, Section 3 certification, economic opportunities numerical benchmarks, and Section 3 complaints. HUD plans for this FAQ to be a living and evolving document with new questions added for guidance as HUD receives them. If you would like to ask additional or clarifying questions, please feel free to contact the Section 3 team at The F.A.Q. can be found here.