It seemed a natural fit.

        The $5 million “Walk to Work” loan program offered Cincinnati a chance to promote urban living and lift its dismal home-ownership rate.

        Fannie Mae, the nation's leading home mortgage financier, created the plan to increase lending to poorer neighborhoods near downtown.

        Yet 15 months later, Fannie Mae is still searching for a single customer to kick off a pilot program that the lender hoped would become a model for other cities.

        “We were a little bit ahead of the game,” said Lisa Tarter, Fannie Mae's senior deputy director in Cincinnati. The problem: Developers and real estate agents still don't know about the program.

        To jump-start the program, Fannie Mae has added Mount Auburn to the list of eligible neighborhoods, which includes West End, Over-the-Rhine and downtown.

        The plan's slow start illustrates the difficulty the city, lenders and real estate agents have in promoting various strategies to encourage home ownership.

        Cincinnati lost 9 percent of its population over the last decade, a faster slide than all but nine U.S. cities. Improving Cincinnati's 38 percent home-ownership rate is seen as essential to prevent further decline.

        “Letting people know is the key,” said Doug Gustina, vice president of community lending for Bank One, one of two banks offering the Fannie Mae loans. “People just aren't aware. If people realize they can tap into that and buy a home, they'll do it.”

        The program allows people to qualify for larger home loans because they don't have to pay typical commuting costs, including gas and parking.

        The savings from walking to work can be used to qualify for a bigger mortgage. So a couple that would normally qualify for a $105,000 mortgage could be approved for a $110,175 under the program.

        There have been no takers, but Ms. Tarter expects that to change soon. She anticipates inquiries from prospective urban dwellers as new home projects are finished in West End and Mount Auburn.

        Two large West End public housing projects, Lincoln Court and Laurel Homes, have been demolished to make way for a mix of new homes and rental units. The first of more than 200 new homes at Lincoln and Laurel will soon be available for purchase.

        A handful of smaller developments such as the 10-home Sycamore Heights project dot the Mount Auburn hillside. The neighborhood's sweeping downtown views and proximity to cultural attractions have lured some middle-class home owners.

        Developers say the Fannie Mae plan could give all those projects a boost.

        “If you work in downtown Cincinnati and want to live close to your work, it's a perfect opportunity,” said Charles Clingman, president and chief executive of Jireh Development Corp., which is developing Sycamore Heights.

        Over the last 15 months, few new homes have been built in Over-the-Rhine and West End.

        New downtown condos typically cost more than $300,000, out of reach for average income earners.

        The Fannie Mae program also applies to existing home sales. But even though 34 existing homes were sold in eligible neighborhoods since July 2000, no buyers used the Fannie Mae program to complete a purchase.

        Part of the challenge: informing real estate agents and home buyers about special loans and tax breaks.

        “We don't have the money to do mass marketing of special loan programs,” said Peg Moertl, Cincinnati's director of neighborhood services.

        Ms. Moertl praised a Cincinnati Area Board of Realtors class, Real Estate Ambassadors, that teaches agents about special city programs. About 40 agents completed the most recent class.

        “We certainly need to make sure the people who help us sell the city of Cincinnati know about this,” Ms. Moertl said.

       
       For more information about the Walk to Work program, call Cincinnati's Department of Neighborhood Services, 352-1947.

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