Section 3 Program
601 Lakeside Ave., Rm 320
Cleveland, Ohio 44114
P: 216.664.4000
F: 216.420.4006
Weekdays 8 am to 5 pm
Section 3 Reporting Requirements
What Is Section 3?
Section 3 Resident Employment is a requirement of HUD which sets goals for the participation of Section 3 Certified Contractors and the employment of Section 3 Residents (low income) of the jurisdiction providing $200,000. 00 or more funding to support the project.
- 30% of new hires by participating contractors must be Section 3 Residents
- 10% of the total dollar amount for building trades work (construction awards) related to the project must go to Section 3 certified contractors, and
- 3% of all other covered contracts (non-construction awards) must go to Section 3 certified businesses.
Who Reports?
ALL contractors who receive $100,000.00 or more in awards on construction projects funded by HUD through the City of Cleveland. (The threshold requirement of $100,000 may be reduced to $10,000.00)
When And What Reports Must Be Submitted?
- At the beginning of a contractor’s work on a project the following documents are due:
- Form A - Core Construction and Non-Construction Contract Awards – This is a list of all the subcontractors which a qualifying contractor expects to employ for the project including construction contractors and non-construction contractors and the expected amount of their subcontract awards (estimates are acceptable). Non-construction contractors include suppliers (without installation), trucking (hauling of materials), security services, waste collection (dumpsters), tree service, non-profit agency fees, engineering services, architectural services, legal services, etc.
- Form B – Acknowledgement Clause - Contractor Version - This acknowledges your obligations as a contractor participating in a Section 3 covered project.
- Form C – Core Employee and New Hire List - This is a notarized list of a company’s core employees at the beginning of a project and must note the date of hire and whether the employee is a Section 3 resident of the City of Cleveland.
- Form D – Low Income Resident Verification - This provides verification signed by the employee that they are income qualified to be considered a Section 3 resident. This must be completed for each of the Core Employees who the company claims as a Section 3 employee.
- Form E – Workforce Utilization - This form identifies all new hires of the contractor during the quarter being reported (even if none) identifying the date of hire and who is a Section 3 resident of the City of Cleveland.
- Fifteen days after the end of each quarter during which a qualifying contractor participated in construction the contractor MUST submit quarterly reports including:
- At the end of your participation as a qualifying contractor ($10,000 or more in awards) you must submit a FINAL Form A (Core Construction and Non-Construction Contract Awards) listing ALL your subcontractors and the information required for each on the form.
Note: Please use Form E (Workforce Utilization) to document your “best efforts” to comply with the 30% on-site construction goal. HUD requires that you MUST provide an explanation for why no new hires are reported during the reporting period. Section 3 Resident Employment is a HUD requirement and you will be evaluated based on your goal achievement and documented efforts.
Also, you may qualify for certification as a Section 3 contractor if (a) 30% of your employees are Section 3 residents of Cuyahoga County and meet the household size and income requirements as outlined in Form D for low or very-low Income Resident Verification or (b) 51% of the ownership of your company is a Section 3 resident of Cuyahoga County.
Questions about reporting for Section 3? Please contact Yvette Mosby at ymosby@city.cleveland.oh.us.
