How and Why to Use Section 3 Section 3 was created to assist in the economic development of businesses as well as individuals. By combining a Good Faith effort with appropriate funding, the ripple effect would cause more housing opportunities as well as provide a means for those in poverty to create and meet financial goals. There is no loss of benefits for contractors either. As long as the guidelines for section 3 are followed, contractors can receive funding and continuous contracts to help their business grow and succeed. Section 3 Difference It's important to remember that section 3 is different from other opportunities for funding through HUD because it is based on income rather than other demographics. A certified women owned business receives no preferential treatment and neither does a certified minority owned business. Section 3 requirements involve using low income employees to complete HUD funded contracts, regardless of race, sex, or other demographics that apply to some of the other HUD funding programs. Area Details Each area has its own specific details that determine the specifics of how to meet the section 3 guidelines. Business must first understand those guidelines before they can meet them. Employees and Section 3 Section 3 aims to get people out of poverty. There is no better way to do that than to offer employment solutions. Therefore businesses who seek to use section 3 funds will be required to have a business that is owned by 51% low income individuals or has a minimum of a full time, long term 30% employee base consisting of low income individuals. Another option is to provide 25% or more of the total funded amount to low income individuals through subcontractors. Though subcontracting can be used as a method of employment, companies are encouraged to provide long term, full time employment instead. This can be done using all manner of employment opportunities such as the ones listed below. ● ● ● ● ● ●
Manual labor Skilled labor Advertisement Dispersement Clerical duties Any other employment vacancies related to the HUD project at hand
Meeting Requirements It may not be easy to find an employee base that can help meet the requirements. However, businesses must show that they put forth the effort, even if the requirement is not met. Though the details vary from area to area, the general concept is to advertise and publish in order to make sure the community is aware of the opportunities for employment. Some suggested methods are below, but companies need to check with their local offices to make sure all requirements are being met. Companies like DBE Good Faith are familiar with the requirements and can help companies meet them.
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Advertise online Advertise in local papers Hang up flyers Contact local employment agencies Contact local businesses Participate in job fairs
The benefits to companies that use section 3 are that the funds will be guaranteed as long as the requirements are met. However, companies also must demonstrate a desire to assist in economic development in the community, making them develop a good name that is more likely to draw in more contracts.
Summary: Businesses who want to earn large contracts may benefit from section 3 funds. By utilizing the local community members, section 3 funds help businesses compete for bids while providing employment to those who need it most.
Bio: DBE Good Faith has been bridging the gap between businesses, communities, and business projects since 2005. With an outstanding level of professionalism, they help contractors navigate the area of bidding contracts and meeting obligations for financial endowment.
Published on Jun 20, 2014
http://dbegoodfaith.com/what-is-a-section-3-business.aspx | The goal for Secction 3 is to get people out of poverty. There are various ways...