On February 13, 2026, HUD issued a notice updating the 2020 Section 3 Rule “Enhancing and Streamlining the Implementation of Section 3 Requirements for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses” by establishing new Section 3 project thresholds.
The thresholds increased from $200K to $300K for Housing and Community Development Projects and from $100K to $150K for Lead Hazard Control and Healthy Homes projects.
The notice tasks HUD with creating a definition for “construction” and establishing a “national construction cost inflation factor” for Section 3 projects.
This notice is effective March 16, 2026.
In Context: There are no thresholds for public housing programs and Section 3 also applies to the entirety of a mixed-finance development project, regardless of whether the project is fully or partially assisted with public housing financial assistance.
