Federal programs & compliance
Davis-Bacon Act
Federal law requiring prevailing wages, per DOL wage determinations, on covered federally funded or assisted construction — 40 U.S.C. §§ 3141–3148.
Definition
The Davis-Bacon Act requires contractors on covered federal and federally assisted construction contracts over $2,000 to pay laborers and mechanics at least the prevailing wages and fringe benefits set by Department of Labor wage determinations, evidenced through certified weekly payrolls.
In housing, coverage arrives through the "Related Acts" — the program statutes, not the tax code: HOME projects with 12 or more assisted units, CDBG-funded residential work of eight or more units, new construction or substantial rehabilitation carrying project-based Section 8 or voucher assistance, public housing, and FHA-insured 221(d)(4) construction. LIHTC by itself triggers nothing.
Why it matters in an underwrite
Wage determinations reprice the trade base and add real administration: certified payrolls, classification disputes, and back-wage restitution risk that lands on the owner through the funding agreement. Run the trigger analysis at the term-sheet stage — a small HOME loan that tips a 40-unit new build into coverage can move hard costs by more than the loan is worth. Where coverage is unavoidable, get prevailing-wage numbers into the GC bid before sizing debt.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.