3.2.6 Federal Labor Standards

A. The General Contractor and all subcontractors for FHA-insured new construction or substantial rehabilitation transactions are required to comply with federal wage and reporting requirements under the Davis-Bacon Act and the Copeland Act. Davis-Bacon requires the payment of prevailing wage rates and regulations under the Copeland Act require the submission of weekly certified payroll reports. Prevailing wage schedules may be obtained from the appropriate HUD Regional Center or Satellite Office. There are limited exceptions to this requirement. Davis-Bacon Wage requirements do not apply for Section 241(a) loans in which the underlying first mortgage is a Section 223(f) loan (or a Section 223(a)(7) loan) or for Section 241(a) loans for projects with a Secretary-held mortgage, if the project did not originally have an FHA-insured loan that was subject to Davis-Bacon. Additionally, Davis-Bacon Wage rates do not apply to off-site improvements, nor do they apply to any site demolition or improvements completed prior to the creation of a federal nexus, defined as the submission of either a pre-application or firm commitment application to HUD.