Section 3 - Economic Opportunities

Small Business & Entrepreneurship Department1. What is Section 3?

Section 3 is a provision of the Housing and Urban Development Act of 1968. The purpose of Section 3 is to ensure that preference for employment, training and contracting opportunities generated from the expenditure of certain HUD funds is directed to local low and very low-income persons, particularly those who receive federal housing assistance and businesses that are owned by or substantially employ such persons.

2. What does the term “Section 3 resident” mean?

A “Section 3 resident” is: 

  1. A public housing resident; or 
  2. A low or very low-income person residing in the metropolitan area or Non-Metropolitan County where the Section 3 covered assistance is expended.

3. What does the term “Section 3 Business” mean?

Section 3 businesses are those that can provide evidence of meeting one of the following three criteria: 

  1. 51 percent or more owned by Section 3 residents; or 
  2. At least 30 percent of its full time employees include persons that are currently Section 3 residents, or were Section 3 residents within three years of the date of first hire*; or 
  3. Provides evidence, as required, of a commitment to subcontract in excess of 25 percent of the dollar award of all subcontracts to businesses that meet the qualifications of A) or B) above.

4. How are the terms “low-income” and very low-income determined?

Low and very-low-household income limits are determined annually by HUD. These limits are typically established at 80 percent and 50 percent of the median income for each locality by household size or the number of people residing in one house. HUD income limits may be obtained from the HUD Income Limit Website

5. What is HUD’s 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.

6. How does my firm submit a self-certification application if it meets the definition of a Section 3 Business?

Businesses can submit an online application for inclusion in the Section 3 Registry.

7. When does a business certification expire?

A certified business must re-certify after 3 years.

8. Where do I find the database of businesses that have self-certified that they meet the definition of a Section 3 Business?

To search the database for businesses please visit the Section 3 Registry.

9. Where can I find more information on the requirements of Section 3?

For more information on the requirements of Section 3, please visit the Section 3 Registry.

10. Are Section 3 requirements and efforts the same as Bexar County's Small, Minority, and Women Owned Business program's stated goals?

To coincide with the economic opportunities afforded by Section 3, there are also a significant number of parallels between Section 3 and Bexar County's SMWBE offices stated mission. Both have at their core an objective to offer government funded projects to historically underutilized businesses. Please visit Bexar County's SMWBE program.