All public and private organizations, including the Schenectady Municipal Housing Authority, which receive federal funds to repair or improve residential areas are expected to provide employment or job training to local residents, provided that the organization will be creating new personnel positions within its own organization. Section 3 also requires contractors and subcontractors receiving funds, directly or indirectly, from the federally-funded organization to abide by Section 3 regulations. Therefore, contractors hired by the SMHA are required to comply with Section 3 if the contracts of the SMHA require the contractor to enlarge its staff. However, if the contract is small and does not necessitate increasing staff, that group is outside the scope of Section 3 and need not be concerned with it unless or until it creates new positions.

The statute enables a Section 3 participant to require that residents be qualified for the positions they fill. If firms find it difficult to fill positions with qualified residents, there are two ways to comply with Section 3 without hiring inappropriate personnel. The firm must first expand its "resident population" to include low income residents of nearby areas, in the hopes of providing employment or training to a qualified individual. However, if after repeated attempts to find qualified personnel, an organization cannot fill positions with acceptable residents, the organization may prove that it has made a good faith effort to recruit and hire in accordance with the statute, and may thus be considered in compliance.