City of Gaithersburg Homebuyer Assistance Loan Program (Downpayment Assistance Program)

At a glance

Amount

Up to $40,000 (up to $25,000 if income is 81% to 120% of AMI)

Type of help

Deferred loan

Where

City of Gaithersburg, Montgomery County

Run by

City of Gaithersburg Housing and Community Development

First-time buyer

First-time buyers only

Income limit

Yes, see below

Minimum credit score

620

Homebuyer education

Required

How the deferred loan works

A second loan with no interest and no payment. You repay it when you sell, refinance, or pay off the first mortgage.

• Interest: 0%
• Monthly payment: None
• When you would repay: The city's page describes the loan as deferred and not forgivable, secured by a promissory note and second deed of trust. Confirm the exact due-on-sale or payoff terms with Housing Services before you apply.

Who qualifies

• First-time buyers only. You must have never owned a home, or not owned one for at least 3 years before your settlement date.
• Income. Household income up to 120% of Area Median Income (table shows the 120% cap by household size, posted 2026-09-22 and updated yearly). Buyers at or below 80% of AMI ($74,800 for 1 person up to $141,000 for 8) may receive up to $40,000. Buyers between 81% and 120% of AMI may receive up to $25,000.
• Extra help for: teachers and educators, first responders, government employees, veterans.
• The home must be inside the City of Gaithersburg corporate limits, not just a Gaithersburg mailing address. Check the address on the city's parcel map before you write an offer.
• You must finance with a Maryland Mortgage Program approved lender.
• When applications compete, the city gives priority to K-12 school employees in Montgomery County, City of Gaithersburg employees, police officers, fire safety employees, and veterans.
• Applicants verify lawful presence in the United States through the federal SAVE system.

How to apply

1. 1Submit the city's pre-application (English or Spanish) to Housing and Community Development so the city can screen your income and first-time status.
2. 2Meet with a Maryland Mortgage Program approved lender and get pre-approved.
3. 3Complete a HUD-approved first-time homebuyer class with one of the city's listed counseling agencies before the city processes your full application.
4. 4Get final mortgage approval and go under contract on a home inside city limits.
5. 5At closing, sign the city's promissory note and second deed of trust and provide the closing documents the city requests.

Watch out for

• Funding comes from the federal Community Development Block Grant, so the pool is set each year and can run short. Ask the city about current availability before you count on it.
• The loan is not forgiven. Budget for repaying it when the note comes due.
• Many homes with a Gaithersburg address sit outside the corporate limits and do not qualify.
• The city does not publish a purchase price limit, but your loan must come from an MMP-approved lender, so MMP limits may apply to your first mortgage.

Straight answers

Sources

• City of Gaithersburg Downpayment Assistance Program page (read Sep 22, 2026)

Program details are summarized from public sources and change without notice. Funding badges reflect the last time we checked, not a guarantee of availability. This is buyer education from a real estate agent, not a loan pre-approval or a commitment to lend. Eligibility is decided by each program administrator and your lender. Equal Housing Opportunity.