Section 3 Program

What is Section 3?
Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968, federal regulation §24 CFR 135.  The City of Detroit is committed to their Section 3 Program to foster local economic development, neighborhood economic development, and individual self-sufficiency.  Section 3 Program requires recipients of certain HUD covered projects and activities, to the greatest extent feasible, to provide employment and job training for Section 3 residents and contracting opportunities to Section 3 businesses in connection with projects and activities in their neighborhoods.


What is a Section 3 Resident?
A Section 3 Resident is: (1) a public housing resident or (2) meets the requirement of household income for low- or very low-income person;

Family Size 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 7 Persons 8 Persons
Income $39,700 $45,400 $51,050 $56,700 $61,250 $65,800 $70,350 $74,850


What is a Section 3 Business Concern?
A Section 3 Business Concern meets one of the following criteria:

  • Fifty-one percent (51%) or more of the business is owned by Section 3 residents; OR
  • Thirty percent (30%) or more current permanent full-time employees are Section 3 residents or within 3 years of the date of 1st employment with the business concern were Section 3 residents; OR
  • Business can provide a firm commitment to subcontract in excess of twenty-five percent (25%) or more of the total dollar amount of contracts to Section 3 business concerns.


Section 3 Compliance
The first step in compliance is submitting a Section 3 Plan.  A Section 3 Plan is submitted when a company is bidding on or has been pre-approved for a HUD funded covered project.  When awarded HUD funds for a covered Section 3 project, the Section 3 Plan is used as a baseline for meeting the minimum goal requirements as stated under Section 3 Goals.  Compliance documents:

  • Section 3 Plan
  • Workforce Form
  • Verification of Income Form
  • Section 3 Summary Form


Section 3 Goals
The goals for each developer, contractor and subcontractor on a covered Section 3 project must acknowledge and actively seek to achieve the following Section 3 goals:

  • At least thirty percent (30%) of all new hires needed to complete the project shall be Section 3 Residents; and
  • At least ten percent (10%) of the total dollar amount of all covered construction contracts shall be awarded to Section 3 Business Concerns; and
  • At least three percent (3%) of the total dollar amount of all covered non-construction (including routine maintenance, HVAC servicing, re-painting, lawn care, and professional services – architectural, engineering, legal services, accounting, marketing, etc.) contracts shall be awarded to Section 3 Business Concerns.


Section 3 Business Concern Certification
Any business seeking to be placed on the City of Detroit certified Section 3 Business list must complete the Section 3 application for certification.