Compliance Calculators

Compliance Calculators › HUD Section 3 Labor Hours

Calculation aid only — not legal or compliance advice, and not affiliated with HUD or any government agency. Always verify against your grantee agreement and HUD's current guidance.

HUD Section 3 Labor Hours Benchmark Calculator

For recipients, contractors, and subcontractors on HUD-assisted housing and community development projects. Computes whether a project meets the 25% Section 3 worker and 5% Targeted Section 3 worker labor-hour benchmarks under 24 CFR Part 75, and whether the project's total HUD financial assistance even triggers Section 3 coverage in the first place.

1. Project assistance amount and program type
2. Labor hours on this project

Benchmark percentages and dollar thresholds last verified: 2026-07-07. Section 3 thresholds are periodically adjusted for construction-cost inflation — bookmark this page and check back if it has been a while, especially after any new HUD Federal Register notice.

Sources: 24 CFR Part 75, Subpart C (Section 3 benchmarks: 25% Section 3 worker labor hours, 5% Targeted Section 3 worker labor hours), as enacted by the Federal Register notice 85 FR 189 / 2020-19183; current $300,000/$150,000 project-applicability thresholds per the Federal Register notice effective March 16, 2026 (91 FR 6752), which supersedes the prior $200,000/$100,000 figures still shown on some older guidance pages. Worker/Targeted-worker definitions corroborated via Vermont Housing & Conservation Board and Chicago Housing Authority Section 3 guidance, since direct automated fetch of eCFR/Federal Register pages was blocked by an edge-network redirect during this tool's construction — a disclosed sourcing limitation, not a fabricated citation. This tool performs a mechanical calculation only and is not legal or compliance advice; verify against your specific grantee agreement and current HUD guidance before relying on this for a real compliance determination.

Who needs this calculation

Any recipient, contractor, or subcontractor on a HUD-assisted housing or community development project — public housing rehabilitation, CDBG/HOME-funded construction, Lead Hazard Control and Healthy Homes grants, and similar HUD financial assistance — must track the share of total construction labor hours performed by Section 3 workers and, separately, by the narrower Targeted Section 3 worker category, once the project's total assistance clears the applicable dollar threshold.

Two common compliance errors this tool flags

First, treating the 25% overall benchmark and the 5% targeted benchmark as the same requirement — they are independent, and a project can clear the broader figure while missing the narrower one. Second, relying on an outdated dollar threshold: the applicability thresholds were raised from $200,000/$100,000 to $300,000/$150,000 effective March 16, 2026 to account for construction-cost inflation, and several still-circulating grantee guidance documents have not been updated to reflect this.

Frequently asked questions

Is this official HUD guidance or a certified compliance determination?
No. This is an independent calculation aid built from HUD's published Section 3 rule (24 CFR Part 75) and Federal Register notices. It is not affiliated with, endorsed by, or a substitute for HUD's own review, and does not constitute a compliance certification.
Does meeting the 25% Section 3 benchmark also satisfy the 5% Targeted Section 3 benchmark?
No. These are two independent requirements under 24 CFR 75.21. A project can meet the overall 25% Section 3 worker benchmark while still falling short of the separate 5% Targeted Section 3 worker benchmark, since Targeted Section 3 workers are a narrower subset.
What is the current dollar threshold for a project to be covered by Section 3?
As of the Federal Register notice effective March 16, 2026, the threshold is $300,000 in HUD housing and community development financial assistance for most projects, or $150,000 for Lead Hazard Control and Healthy Homes program assistance. These replaced the prior $200,000/$100,000 figures, so older guidance documents may show outdated numbers.
Can a Targeted Section 3 worker's hours exceed the Section 3 worker hours on a project?
No. A Targeted Section 3 worker is, by definition, a subset of Section 3 workers, so Targeted Section 3 hours can never exceed total Section 3 worker hours on the same project. If your numbers suggest otherwise, check for double-counting.

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