Section 3 Transition Guidance
HUD’s Section 3 final rule went into effect July 1, 2021. Active TxCDBG grants must transition to the new documentation process as described in Policy Issuance 20-01
If you are not sure whether your grant contract should be reported based solely on the previous rule or transition to the new policy, please review the chart on page 2 of the Policy Issuance.
Additional policy clarification and resources have been posted to TDA’s Project Implementation Manual webpage. TDA will continue to field questions and share resources as needed, including any additional resources provided by HUD.
•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 Section 3 Opportunity Portal and Business Registry
Under HUD's Section 3 program, persons with low- and very-low incomes can get employment and training opportunities from organizations who receive certain HUD financial assistance. Businesses that provide economic opportunities to persons of low- and very-low incomes are also eligible for contracting opportunities from organizations who receive certain HUD financial assistance. To help coordinate this assistance HUD has created an Opportunity Portal, https://hudapps.hud.gov/OpportunityPortal/
The HUD Opportunity Portal matches Section 3 Residents to jobs and training opportunities and Section 3 Businesses to contracting opportunities. Additional information on the requirements of Section 3, can be found at http://www.hud.gov/section3
The Section 3 Business Registry is a tool for qualifying Section 3 Business to identify themselves for contracting opportunities. This will help communities that receive HUD funding find a business or contractor that will work on HUD projects or satisfy a HUD requirement. Eligible businesses must demonstrate that they are responsible and can successfully uphold the terms and conditions as outlined in the proposed contracts. The Business Registry can be found here, https://portalapps.hud.gov/Sec3BusReg/BRegistry/RegisterBusiness
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. For information go to, https://portalapps.hud.gov/Sec3BusReg/BRegistry/AmISection3
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.
To register on the Opportunity Portal, please visit:
To register on the Business Registry, please visit:
To find out if you are a Section 3 Business, please visit:
To search for a Section 3 Business, please visit: