Davis Bacon Wages for HUD 221(d)(4) Loans
How Davis Bacon Wages Affect HUD Multifamily Borrowers Learn the basics of the Davis Bacon Act and how it affects wage requirements for developers using HUD 221(d)(4) loans.
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The Davis-Bacon Act of 1931 requires workers on public works projects to be paid the local prevailing wages. This rate is determined by the U.S. Department of Labor. This rate is paid to all mechanics and laborers on any Federal government or District of Columbia construction project that exceeds $2,000.
Because of the nature of many HUD multifamily projects, including those using HUD 221(d)(4) loans, compliance with Davis-Bacon is required. Compliance is overseen by HUD’s Office of Labor Relations. HUD’s definition of construction includes alteration and/or repair and includes painting and decoration.
Since HUD does not contract directly for construction services, in most cases Davis-Bacon only applies to projects which contain one of HUD’s “Related Acts”, often referred to as the Davis-Bacon and Related Acts (DBRA). These include:
The U.S. Housing Act of 1937, the National Housing Act
The Housing and Community Development Act of 1974
The National Affordable Housing Act of 1990
The Native American Housing Assistance and Self-Determination Act of 1996.
To determine the Davis-Bacon wage minimum in the area you wish to develop, check out this free Davis Bacon wage calculator, provided by wdol.gov, a collaboration between the U.S. Department of Labor and several other government agencies.
For additional information on the Davis-Bacon Act (DBA), read the U.S. Department of Housing and Urban Development Labor Relations Desk Guide LR01.DG.