While some mortgage lenders are looking for ways to sustain loan demand as the population ages, a thrift in Ohio is targeting first-time homebuyers.

Citfed Bancorp, of Dayton, is placing a new emphasis on young couples and single professionals who may not realize they can qualify for home loans.

"This is a tremendous growth opportunity for the mortgage company in our communities," said C. Bruce Culbreth, vice president and sales manager for the thrift's home lending unit, Citfed Mortgage.

Citfed Bancorp, with $2.9 billion of assets, lends mostly in Ohio but wants to build its presence in surrounding states. The first-time homebuyer program is seen as a way to build name recognition while also allowing the company to nurture traditional mortgage lending.

To be effective, the campaign must feature tailored products and targeted marketing, industry observers said.

Citfed Bancorp believes it has the right approach to boost lending to over $1 billion in its current fiscal year, which began in April, from $750 million last year. Along the way, Citfed hopes to boost a servicing portfolio that now contains $5 billion of mortgages.

The company launched the first-time-buyer initiative this spring, with a 40-year adjus-table mortgage as flagship product to allow more younger consumers to qualify. For instance, borrowers receiving a $100,000 loan with a 40-year span can have monthly incomes $160 smaller than would be necessary with a traditional 30-year loan, Mr. Culbreth said.

Put another way, a mortgage loan of $100,000 with a 7.375% interest rate would carry principle and interest payments of $691, amortized over 30 years. The same loan amount and interest rate amortized over 40 years produces payments of $648.85, an annual reduction of $500.

Borrowers wind up paying more interest in the long run. But the trade- off is more savings up front, when borrowers need extra cash most, Mr. Culbreth said.

Citfed Bancorp is supporting the drive with advertisements in local publications and seminars at its branches.

"We're positioning ourselves as the company that will take the time to sit with borrowers and help them figure out what's best," Mr. Culbreth said.

To that end, Citfed Mortgage offers a host of free services, including pre-qualification counseling and assistance with longer-range financial planning.

"We think this will especially help first-time homebuyers and other buyers needing to keep payments as low as possible," said Mary Larkins, president of the Citfed's mortgage unit.

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