HUD has issued a notice maintaining its existing Section 3 benchmark goals for hiring low- and very low-income workers on covered housing projects, citing an absence of sufficient data to justify a revision. The agency is simultaneously opening a comment period, requesting input from grantees, contractors, and other stakeholders on compliance challenges and recommendations for future benchmarks. The updated notice takes effect in November, making the comment window immediately relevant for LIHTC developers, syndicators, and lenders whose projects layer HUD funding sources.

Key Takeaways:

• HUD is holding Section 3 benchmarks at their original levels — no upward revision — citing unavailable data as the rationale.
• The updated notice takes effect November 2026, creating a short window for stakeholder comment.
• Section 3 obligations apply to projects funded with HUD dollars including HOME, CDBG, and certain public housing capital sources commonly layered into LIHTC deals.
• HUD is specifically requesting quantitative data on challenges meeting the goals — thin comment records risk leaving future benchmarks set on HUD's internal data alone.
• Developers and general contractors with covered projects should document compliance experience — successes, gaps, and root causes — for submission.
• Housing finance agencies and syndicators can amplify impact by coordinating portfolio-level responses that reflect systemic patterns across multiple projects.
• A future benchmark revision is clearly signaled; this comment period is the primary mechanism for industry to shape what that revision looks like.

For affordable housing stakeholders, this notice is less about the current benchmarks — which remain unchanged — and more about positioning for the next revision cycle. HUD's explicit request for data means the comment record will directly inform future rulemaking. Developers, contractors, syndicators, and state HFAs should treat this as an advocacy moment, not a compliance update. Coordinated, data-rich submissions are the most effective tool available to ensure future Section 3 benchmarks reflect real-world labor market and workforce pipeline conditions.

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