The federal government distributed $38 million to 27 Minnesota community development financial institutions this week, part of $1.25 billion in pandemic relief funds sent nationally to development groups.

Kate Barr, chief executive of Propel, a Twin Cities agency that advises nonprofits on financial and management issues, said the funds are important because of the demands that the pandemic put on programs, infrastructure and reserves over the last 15 months.

Treasury-designated CDFIs are nonprofit business counselors and financiers that primarily serve low-income areas with commercial and residential projects that otherwise might not get done.

Barr, a commercial banker until she took over Propel years ago, said Propel will use its $1.8 million in Rapid Relief Program funds to help nonprofit clients recover with flexible capital.

"Nonprofits are re-inventing the way they work and deliver programs and services to their community and need capital for technology, infrastructure and reserves," Barr said.

"The funds make it possible to offer longer terms and lower interest rates and to have a portion of the loan principal forgiven and converted to grants to help replenish and build capital for sustainability," she said.

In addition to Propel, other Minnesota recipients include the African Development Center, Latino Economic Development Center, MEDA, Neighborhood Development Center, Habitat for Humanity of Minnesota, the Northland Foundation, Mni Sota Fund and White Earth Investment Initiative.

Treasury Secretary Janet Yellen, in remarks earlier this week, said the funds target "places that the financial sector historically hasn't served well.''

She added, "We know that every dollar injected into a CDFI catalyzes eight more dollars in private-sector investment."

The award recipients nationally include 58 organizations that committed to direct their awards to investments in Native American, Native Alaskan and Native Hawaiian communities. They received a total of $54.6 million in awards.