Response From HUD: If the funds for those agreements is paid using Public Housing Financial Assistance (§ 75.3(a)(1) – Public housing financial assistance. Public housing financial assistance means: (i) Development assistance provided pursuant to Section 5 of the United States Housing Act of 1937 (the 1937 Act); (ii) Operations and management assistance provided pursuant to Section 9(e) of the 1937 Act; (iii) Development, modernization, and management assistance provided pursuant to Section 9(d) of the 1937 Act; and (iv) The entirety of a mixed-finance development project as described in 24 CFR 905.604, regardless of whether the project is fully or partially assisted with public housing financial assistance as defined in subsections (i) through (iii) of this section.) Then yes- those staff hours should be counted, but not all PHA staff qualify as Section 3 workers. Only PHA staff that meet the definition of a Section 3 worker or Targeted Section 3 worker would qualify to be counted toward total Section 3 or Targeted Section 3 labor hours. Once a PHA determines a Section 3 worker or Targeted Section 3 worker is hired or currently employed, the PHA would just report those hours as the numerator over the total labor hours funded with public housing financial assistance as the denominator.