Basic Information | Eligibility | Additional Resources

Section 3 Program

Basic Information

Section 3 of the Housing and Urban Development Act of 1968 requires that Housing Authorities attempt to provide economic and employment opportunities to low-income residents and businesses when certain HUD funds are expended. Types of work that may fall under this category are construction, maintenanance, certain types of services and a broad range of other job categories.

It is the policy of the Housing Authority of Maricopa County that when a project contains a HUD Section 3 clause, best efforts will be made to meet those legal requirements. Contractors are expected to cooperate with HAMC to meet those requirements and will likewise require that their employees and subcontractors cooperate also. If an organization (award recipient, contractor, or subcontractor) was hired under a contract containing a Section 3 clause (required by HUD for contracts of more than $100,000 for contractors and subcontractors, and more than $200,000 for award recipients), that organization will have specific hiring, contracting, and reporting obligations. In simple terms, contractors are expected use part of the funds received for a given contract to hire or use persons or business that are Section 3 certified. HUD requires that HAMC report on specific award recipients, contractors, and subcontractors. To do so, HAMC must collect information from the award recipients or contractors, which in turn must also collect information from their subcontractors.

The legal obligations of an organization receiving funds with a Section 3 clause are:
  •   Provide outreach/training for Section 3 residents, and report on the outreach and training undertaken.
  •   To the greatest extent feasible, hire and train Section 3 residents, and report on employees and new hires.
  •   To the greatest extent feasible contract with Section 3 businesses, and report on contracts and subcontracts.

According to federal legislation, the minimum numerical targets for contract award recipients for meeting Section 3 requirements are as follows: 10% of the dollar amount of contracts for building trades work and 3% of the dollar amount of contracts for other work (non-building trades work) must be with be Section 3 certified businesses or individuals. All prime contractors must conduct best efforts to meet these requirements. HAMC has guidelines to assist prime contractors to meet 'best effort' hiring goals, to report on Section 3 work and on how to demonstrate outreach efforts. Compliance with Section 3 requirements is monitored and those companies that do not comply with Section 3 contractual obligations maybe subject to fines and other penalties.

Eligibility and Registration

To be eligible for Section 3 certification, businesses must meet one of the following qualifications: Fifty-one percent of the business has to be owned by a resident of Maricopa County who meets specific income guidelines or 30% or more of its permanent workforce must be comprised of residents who live in Maricopa County and meet official low income guidelines. To qualify for Section 3, "Low Income" is defined as families (including single persons) whose incomes do not exceed 80 per centum of the median income for the area in which they reside. A table with current income limits by family size for Maricopa County is available here.

HAMC has a certification process for businesses and individuals that would like to be included in our HUD Section 3 database that is provided to HAMC contractors. To be certified, businesses and/or individuals must register and fill out the required forms. HAMC's Official Section 3 policy statement can be found here. HAMC residents and individuals seeking to register for Section 3 preferences in hiring may use this form and eligible businesses seeking contracting priority may use this form. For more detailed and important information contact HAMC's Section 3 coordinator, Laura Schreiber (phone: 602-744-4533, email: l.schreiber@maricopahousing.org).

Additional Resources

  •   An overview of Section 3 requirements and objectives can be found in a HUD informational flyer, available here.
  •   Visit the official Section 3 page on the Department of Housing and Urban Development website, link available here.
  •   Read HUD's Section 3 regulations: CFR Title 24 - Housing And Urban Development, Part 135 - Economic Opportunities For Low- And Very Low-Income Persons, document available here.