HUD’s Section 3 final rule went into effect July 1, 2021 and is described in Policy Issuance 20-01: Federal Revisions for Section 3 Requirements. Policy Issuance 20-01 added the newly created Section 3 documents to the existing thresholds for requesting grant funds.  All contracts requesting payment of grant funds for the first time under one of the following thresholds AND contracts requesting additional funds after previously satisfying the threshold requirements in effect at the time must provide the following Section 3 documentation as required by the Policy Issuance: 

Group A:  Section 3 Service Area Map
Group B:  Facilitation of general employment opportunity information (agenda or minutes documenting a public presentation to the local governing body) 

For services contracts awarded on or after July 1, 2021, please ensure that your local files contain records of the efforts to facilitate contracting opportunities for Section 3 Businesses. For all services contracts and subcontracts subject to the new Section 3 final rule, please ensure that your local files contain records of both the actual hours worked on the project per employee AND the efforts to identify potential section 3 workers as new employees are needed for the project.

For questions regarding the new Section 3 policies, please email CDBGReporting@TexasAgriculture.gov and include in the subject line “Section 3 TA”.

HUD's Section 3 Opportunity Portal and Business Registry was phased out September 1, 2023.

Section 3 Resident: any person who is a public housing resident or a person who resides in a metropolitan area or non-metropolitan county of the project and whose family income does not exceed HUD low income limits. 

Section 3 Business: a. 51% or more owned by residents of public housing or persons whose income does not exceed HUD’s local area low-income limits(i.e. Section 3 residents); or b. Comprised of 30% or more full-time employees who are Section 3 residents; or c. Can provide evidence of a firm commitment to award 25% or more of sub-contracts to businesses that meet a. or b. 

Section 3 Recipients and Employers: any entity that receives funding directly from HUD such as a public housing authority, a city or county department of housing and community development, a state or other HUD grantee.