Both were scheduled to shut down in March 2005, but the State of Maryland promised a $150,000 grant to help keep them going.
Senior Living Alternatives received the first half of the grant, and met Thursday with Van Mitchell, the Maryland Department of Health & Mental Hygiene's principal deputy secretary, about getting the second half.
Del. Christopher B. Shank, R-Washington, who attended the meeting, said Senior Living Alternatives was supposed to meet certain conditions to get the grant money.
In particular, the department wants to make sure Senior Living Alternatives is committed to keeping its program going, he said.
The department also wants the organization to help itself through marketing and fundraising - as United Way, Girls Inc. and other groups do - but so far, Senior Living Alternatives has been focused on trying to survive, Shank said.
Shank said Washington County is filled with generous people willing to help more if asked.
Davis said Senior Living Alternatives already has received a good response from the public.
The organization is about to start an endowment fund, she said.
The City of Hagerstown has pledged to increase its funding to Senior Living Alternatives from $50,000 to $55,000 next year.
This year, Washington County contributed $22,250.
Senior Living Alternatives asked the county to give another $106,050 next year, but the county trimmed the increase to $1,120.
Neither the city nor the county has approved its 2006-07 budget yet.
Davis said Senior Living Alternatives has a budget this year of about $700,000. With North Holly Place closing, the budget will be cut by about half.
The closing also means that about half of the 23 employees who serve the two homes will lose their jobs, she said.