After more than a decade, Locus has reintroduced the New Markets Tax Credit (NMTC) Program into our capital strategy, bringing back a powerful tool to advance community development. In fall 2024, Locus Impact Fund received its first NMTC allocation since 2011 and began deploying that capital in 2025. A second allocation followed at the end of 2025, reinforcing NMTC as a sustained and scalable component of our portfolio.
NMTC is a transformative program because it allows financial intermediaries like Locus to bring flexible, patient capital to projects that are often difficult to finance through conventional means. Many of the communities we serve, particularly in rural and highly distressed areas, face persistent capital gaps that limit access to essential services, quality jobs, and economic opportunity. NMTC helps bridge these gaps by attracting private investment into high-impact projects that deliver lasting community benefits.
We use New Markets Tax Credits to help fund larger, more complex projects typically those needing $5 million or more. The way it works: we bring together multiple funding sources (bank loans, community capital, and grants) into one financing package, where tax credit proceeds fill in the gaps that traditional financing can’t cover.
The end result is a flexible pool of capital that makes projects more financially viable — with below-market interest rates, interest-only payment periods, and the possibility of partial loan forgiveness at the end of the program’s compliance period.
At the same time, we deploy a portion of each allocation through a small loan pool strategy, extending the benefits of NMTC to smaller projects. This is especially important in rural communities, where projects may not be large enough to support a traditional NMTC structure but still have meaningful community impact. Through this approach, we ensure NMTC reaches a broader range of borrowers while maintaining a focus on high-impact investments.
Locus has fully committed its 2024 NMTC allocation and will launch its first small loan pool in 2026. We are also building a strong pipeline for our most recent allocation, with more than 36 projects under review representing approximately $851 million in total project costs across sectors including mixed-use, healthcare, community facilities, hospitality, and industrial.
Given that demand far exceeds available allocation, Locus prioritizes projects based on the following criteria:
- Location – Projects located in highly distressed, NMTC-qualified communities
- But-For Need – Demonstrated reliance on NMTC subsidy to proceed
- Community Alignment – Alignment with local priorities and community needs
- Readiness – Ability to proceed to closing with NMTC financing
- Outcomes – Potential to deliver quality jobs, expand access to essential services (healthcare, education, training), and improve access to healthy food
Importantly, recent federal legislation has made NMTC a permanent program, providing long-term certainty for investors and communities alike. For the CDFI industry, this permanence is especially significant. NMTC has been one of the most effective tools for directing private capital into underserved communities across the country, supporting billions of dollars in investment in rural and urban areas alike.
CDFIs play a critical role in deploying this resource by bringing local knowledge, mission alignment, and disciplined underwriting to ensure capital reaches projects that deliver meaningful community outcomes. From healthcare facilities and community centers to manufacturing, food access, and workforce development, NMTC has helped finance projects that expand opportunity and strengthen local economies nationwide.
For Locus, the return of NMTC to our toolkit represents more than an additional financing tool. It is a catalyst to deepen our impact, close financing gaps, and ensure that communities have access to the resources they need to thrive.