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HUD & FHA Glossary
Last updated on Feb 19, 2023
1 min read

What is the Davis-Bacon Act?

The Davis-Bacon Act of 1931, usually known as Davis-Bacon, established a requirement to pay local prevailing wages for public works projects. HUD’s Office of Labor Relations oversees Davis-Bacon compliance which is required by many HUD programs.

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Davis-Bacon Act Rules in Relation to HUD 221(d)(4) Loans

The Davis-Bacon Act of 1931, usually known as Davis-Bacon, established a requirement to pay local prevailing wages for public works projects. HUD’s Office of Labor Relations oversees Davis-Bacon compliance which is required by many HUD programs.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form below and a HUD lending expert will get in touch. 

Related Questions

What is the purpose of the Davis-Bacon Act?

The Davis-Bacon Act of 1931 established a requirement to pay local prevailing wages for public works projects. It is overseen by HUD’s Office of Labor Relations Davis-Bacon compliance, which is required by many HUD programs. This requirement does not typically apply to HUD 223(f) loans, but does apply to HUD 221(d)(4) loans.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form and a HUD lending expert will get in touch.

How does the Davis-Bacon Act affect commercial real estate?

The Davis-Bacon Act of 1931 requires contractors to pay local prevailing wages for public works projects. This applies to many HUD programs, including HUD 221(d)(4) loans for multifamily construction. This means that contractors working on HUD 221(d)(4) projects must pay the local prevailing wage rate for the area in which the project is located. To learn more about HUD 221(d)(4) loans, click here.

What are the requirements for contractors under the Davis-Bacon Act?

Under the Davis-Bacon Act, contractors are typically only subject to these requirements if they are performing manual labor jobs such as plumbers, elevator mechanics, and ironworkers. Management personnel and architects are exempted from these requirements, though foremen may be covered if they spend more than 20% of each working week on physical labor tasks. The location where the work is performed can also be a criteria for determining eligibility. Broadly speaking, if the labor is conducted at the development site, the worker is probably covered under the Davis-Bacon Act. Source

What are the penalties for violating the Davis-Bacon Act?

The penalties for violating the Davis-Bacon Act can be severe. According to the U.S. Department of Labor, contractors who fail to comply with the Act can be subject to civil and criminal penalties, including fines, back wages, and debarment from future contracts.

The U.S. Department of Labor also states that contractors who fail to comply with the Act can be subject to civil and criminal penalties, including fines, back wages, and debarment from future contracts.

The U.S. Department of Labor also states that contractors who fail to comply with the Act can be subject to civil and criminal penalties, including fines, back wages, and debarment from future contracts.

How does the Davis-Bacon Act affect small business financing?

The Davis-Bacon Act of 1931 requires contractors to pay local prevailing wages for public works projects. This requirement applies to many HUD programs, including HUD 221(d)(4) loans. Small businesses that are looking to finance a HUD 221(d)(4) loan should be aware of the Davis-Bacon Act and its requirements. To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, click here.

What are the benefits of the Davis-Bacon Act for contractors?

The Davis-Bacon Act provides benefits to contractors by ensuring that they are paid the local prevailing wages for manual labor jobs, such as plumbers, elevator mechanics, and ironworkers. This is especially beneficial for contractors who are working on public works projects, as they are guaranteed to be paid the local prevailing wages instead of the minimum wage. Additionally, the Davis-Bacon Act provides oversight by HUD’s Office of Labor Relations Davis-Bacon compliance, which helps to ensure that contractors are paid fairly. Source 1 and Source 2.

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