Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities

Section 3 Business & Compliance Resources

“Greatest Extent Feasible”

Recipients and Section 3-covered contractors may demonstrate compliance with the “greatest extent feasible” requirement of Section 3 by meeting benchmarks (replaces “numerical goals”) set forth in 24 CFR §75.23 (Safe harbor) for providing training, employment, and contracting opportunities to Section 3 residents and section 3 business concerns (updated periodically in the Federal Register). Benchmarks for this rule measure compliance by percentage of work hours performed by Section 3 workers, replacing the “new hires” metric prescribed previously in the Interim Section 3 Rule. Obligations outlined in Subpart C of 24 CFR §75.19-§75.27, “Additional Provisions for Housing and Community Development Financial Assistance,” identify implementation procedures expected of contract awardees. In the event that a subrecipient or contractor could not meet prescribed Section 3 benchmarks, they must document limitations to meeting benchmarks, strategies attempted, and resources available. (§75.25 Reporting, (b) Additional reporting if Section 3 benchmarks are not met.)

Some valuable resources cost users nothing and can actually save time and money. Federal, state, and local jurisdictions support networks of institutions that provide training, job listing, job referrals, applicant screening, and small business counseling. In many cases, the services they offer cost nothing to clients because government programs pay for them. Follow links on this page to Texas Workforce Commission and Small Business Development Centers.

Certifications for Residents and Businesses

In accordance with 24 CFR 75.31 Recordkeeping, residents and business concerns seeking Section 3 preference shall certify, and submit supporting evidence to the subrecipient, contractor, or subcontractor to verify that they meet the qualifications for Section 3 priority. For persons hired or businesses contracted, subrecipients will keep certification documents on file.

Each specific HUD program governing a given Section 3 project will determine which records, reports, and other documents a subrecipient must maintain to demonstrate compliance with Section 3. FHEO will no longer prescribe these records.

HUD sponsors a Business Registry (HUD, Nation-wide), where employers and subrecipients may find businesses already certified for Section 3, to solicit bids from.

Resources for Recruiting & Outreach to Section 3 Residents and Businesses (other economic opportunities)

Section 3 encourages businesses and trade unions to collaborate with local community colleges and technical schools to develop curricula and conduct training that improves the abilities of their workforce to meet local business needs.

  • Texas Workforce Commission’s Skills Development Fund supports the development and implementation of customized job-training projects. A private for-profit business, business consortium, or trade union may identify training that employees need, and then partner with a public community or technical college, or the Texas Engineering Extension Service (TEEX). The Skills Development Fund pays for the training and the college administers the grant using training methods that best accommodate the business, such as classroom, simulation, on-site, hands-on, and online instruction. Customized training through state-funded Skills grants ensures existing workers receive training to upgrade their skills and new employees gain proficiency in industry skill standards. For more information on the Skills Development Fund, including Frequently Asked Questions, visit https://www.twc.texas.gov/partners/skills-development-fund.
    • Contact the Workforce Business Services Development Team toll free at (877) 463-1777 or email Skills@twc.state.tx.us to discuss your project. An experienced team of Workforce Business Services professionals provides consultation and technical assistance to connect businesses, colleges, and workforce boards.
  • Local Workforce Development Boards (affiliated with Texas Workforce Commission) Workforce Development Boards, that oversee the Local Workforce Solutions Offices, can help project owners and developers to meet Section 3 requirements for notifying eligible Section 3 residents about employment and training opportunities associated with your construction, rehabilitation, or demolition project. Find your local Workforce Solutions Office here: https://www.twc.state.tx.us/dirs/wdbs/wdbweb.html
    • Contact the Business Services Unit of the local Workforce Development Board that serves your project area. Talk with them to find out what services they can offer. Let them know that you want to satisfy HUD Section 3 Obligations (24 CFR 75) and make the greatest feasible effort to reach out to low-income residents in the project service area. Ask if and how your project might qualify for local employer incentives.
  • Small Business Development Centers (funded by Small Business Administration) This university-based network provides counseling and training to help small businesses discover and obtain qualifications necessary to win bids on contracts funded by government programs. Housing developers and subrecipients can use the SBDC client network to find qualified businesses. Anyone can certify themselves as a Section 3 business but TDHCA subrecipients and housing developers cannot contract with one who does not meet essential qualifications for work under a government-funded contract. SBDC counselors teach businesses to meet these qualifications.

    The following networks cover the entire state of Texas. Contact the center that serves the county in which your project or business resides. Ask to speak with a small business contracting advisor.
  • Minority Business Development Agency (affiliated with U.S. Department of Commerce)
  • Texas Comptroller, Centralized Master Bidders List
  • Texas Association of Community Action Agencies: https://www.tacaa.org/

Caution: Qualifications for Minority or Women-Owned Business status differ from qualifications for HUD Section 3, but some may qualify for both.

If you have any questions, please email hudsection3@tdhca.state.tx.us, your contract specialist, or contact TDHCA Program Services staff.