Last updated 2026-07-25
TL;DR
A group home is a licensed residential setting where a small number of unrelated people (often with disabilities, mental illness, or care needs) live together with staff support. It differs from assisted living, which is typically larger and senior-focused, and from a nursing home, which provides skilled medical care. Licensing rules and terminology vary by state.
What is a group home?
A group home is a licensed residential home, usually a house in a regular neighborhood, where a small number of unrelated people live together and receive some level of support, supervision, or care from paid staff. The people living there might be adults with intellectual or developmental disabilities (IDD), adults with serious mental illness, people in addiction recovery, youth in foster care, or seniors who need help with daily activities but not full medical care. The federal government does not run one single "group home" license. Each state defines the term, sets the staffing ratios, and issues the license through its own health or human services department. That's why a group home in Ohio might look completely different, on paper, from one in Texas, even though the day-to-day reality (a handful of residents, shared common areas, a live-in or shift-based staff person) looks similar. Most group homes house somewhere between 3 and 8 residents, though some states cap smaller "family-style" homes at 4 and treat anything larger as an institutional facility subject to different fire and building codes. The core idea across every state is the same: fewer people, more personal attention, and a home environment instead of an institutional one. If you're comparing licensing categories side by side, our state licensing guides break down how each state's application process actually works.
What is assisted living?
Assisted living is a type of licensed residential care built mainly for older adults who need help with things like bathing, dressing, medication reminders, and meals, but who don't need the round-the-clock skilled nursing care a nursing home provides. Assisted living communities range from small board-and-care homes with 6 residents to large campuses with 100 or more units. According to the CDC's National Center for Health Statistics, the median assisted living community in the United States has 33 licensed beds, and residents pay for both housing and a package of personal care services [1]. Most states license these communities under names like "assisted living facility," "residential care facility," or "personal care home," and require a state survey (inspection) before the license is issued and on a recurring basis after that. Assisted living sits in the middle of the care spectrum: more support than independent living, less medical intervention than a nursing home. Staff are usually not required to be nurses, though many communities employ at least one licensed nurse for medication oversight, depending on state rules.
What is an assisted living facility (and how is it licensed)?
An assisted living facility is the physical building and licensed business entity that provides assisted living services. It's the term regulators use on the license itself. To get one, an operator typically has to submit a business license application, pass a background check (often through the state's health department and sometimes the Department of Justice or a state police fingerprint unit), meet building and fire code requirements, and pass a pre-licensing inspection. Requirements vary a lot. Some states require a specific administrator credential (a licensed assisted living administrator, sometimes called an RCFE administrator in California) [2]. Others require a needs assessment for every incoming resident, a written staffing plan tied to resident acuity, and an emergency preparedness plan reviewed annually. Application fees, timelines, and required floor plans are state-specific, so confirm the exact fee schedule and forms with your state licensing agency before you budget or sign a lease. For a side-by-side look at how these categories compare, see assisted living facility and assisted living facilities.
What is assisted living vs nursing home?
| Regulated by | State health/social services agency | State agency + federal CMS certification | |
|---|---|---|---|
| Medical care level | Help with ADLs, medication reminders | 24-hour skilled nursing, rehab, clinical care | |
| RN staffing requirement | Varies by state, often none mandated | Federally required 8 hrs/day minimum [3] | |
| Typical resident | Needs help with daily tasks | Needs ongoing medical/nursing care | |
| Medicare coverage | Generally not covered | Short-term skilled stays can be covered | People often move from assisted living to a nursing home when their medical needs increase past what personal care staff can safely manage. |
The short answer: assisted living provides help with daily living activities in a home-like setting, while a nursing home (skilled nursing facility) provides 24-hour medical care supervised by licensed nurses and often a physician, for people who need ongoing clinical treatment. Nursing homes are certified under federal Medicare and Medicaid rules and must meet requirements spelled out in 42 CFR Part 483, including having a registered nurse on duty at least 8 consecutive hours a day, 7 days a week [3]. Assisted living facilities are licensed at the state level and don't have that federal nursing staffing mandate; staffing rules come entirely from state code. Here's a quick comparison: | Feature | Assisted Living | Nursing Home |
What does assisted living provide?
Assisted living typically provides a private or semi-private room or apartment, three meals a day, housekeeping, laundry, transportation to appointments, social activities, medication management, and help with activities of daily living (ADLs) like bathing, dressing, toileting, and mobility. Most states require a written service plan for each resident, created after an initial health and functional assessment, and updated at least annually or whenever the resident's condition changes materially. Some states cap the level of care a facility can provide; residents who need two-person transfers, ventilators, or IV therapy often have to move to a nursing home or a specialized memory care unit, depending on the facility's license type. What assisted living does not typically provide is ongoing skilled nursing care, rehabilitation therapy, or hospital-level monitoring. That line matters a lot for families comparing options, and it's worth asking any facility directly what its state license actually permits, since "assisted living" is not one uniform service package nationwide.
What is the difference between a group home and assisted living?
A group home is usually a smaller, more general term covering residential care for people of any age with disabilities, mental illness, or behavioral health needs, while assisted living is a specific licensing category almost always aimed at older adults needing help with daily living. In practice, a lot of group homes and assisted living facilities look similar: a house or small building, a handful of residents, and paid staff. The differences show up in the license type, the population served, and the regulatory agency. A group home for adults with IDD might be licensed by a state's developmental disabilities agency, while an assisted living facility is licensed by the state's department of health or aging services. The paperwork, staffing ratios, training hours, and inspection checklists differ accordingly. If you're trying to figure out which license category fits your target population, start by identifying who you plan to serve (seniors, adults with IDD, people with mental illness, people in recovery) because that answer usually points you to the right regulatory agency before you even look at building requirements.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the cost of room and board or personal care services at an assisted living facility. Medicare.gov states plainly that Medicare "doesn't cover: Long-term care (also called custodial care)" if that's the only care needed, and assisted living is generally classified as custodial care [4]. Medicare Part A can cover a short-term stay in a skilled nursing facility after a qualifying hospital stay, but that's a different setting with different rules, and it's time-limited (typically up to 100 days per benefit period, with a copay starting on day 21) [5]. Medicaid is a different story. Many states offer Medicaid Home and Community-Based Services (HCBS) waivers that help cover personal care costs in assisted living or group home settings, even though Medicaid still generally doesn't pay for the room-and-board portion. CMS describes HCBS waivers as a way for states to "furnish an array of home and community-based services that assist Medicaid beneficiaries to live in the community" instead of an institution [6]. Coverage rules, waiver names, and eligibility income limits are state-specific, so check your state Medicaid agency's waiver list directly. For operators building a business plan around Medicaid reimbursement, our funding and Medicaid resources walk through waiver types state by state.
How to start a group home (the real steps)
Starting a group home means becoming a licensed provider under your state's specific category for the population you plan to serve, and it takes months, not weeks, once you count zoning, staffing, and inspection timelines. Here's the general sequence most states follow, though the order and exact forms vary: 1. Pick your population and license type. Adult foster care, IDD group home, mental health residential, recovery residence, and senior residential assisted living (RAL) are usually separate license categories with separate rules. 2. Confirm zoning. Check your local zoning code and, where relevant, state and federal fair housing protections for group homes in residential zones before you sign a lease or buy property. See our guide on assisted living at home for how home-based models handle this. 3. Write your policy and procedure manual. States typically require written policies on medication management, resident rights, emergency procedures, abuse reporting, staffing plans, and admission/discharge criteria before they'll issue a license. 4. Pass background checks. Owners, administrators, and direct care staff usually need fingerprint-based criminal background checks and, in many states, a check against a state abuse/neglect registry. 5. Meet building and fire code. Fire marshal sign-off is required in nearly every state, and requirements differ for homes with 6 or fewer residents versus larger facilities. 6. Submit the license application and fee. Fees, forms, and processing times vary by state and license type, so confirm current fee schedules directly with your state licensing agency. 7. Pass the pre-licensing inspection. A state surveyor visits the property to confirm it matches the application, meets safety code, and has required documentation on site. 8. Get your license and start operating under it, including any required initial and ongoing staff training hours. The paperwork burden is real. This is exactly where a licensing kit builder or a pre-built policy manual template saves you from writing 40-plus required policies from a blank page; GroupHomePath's $299 State Group Home Licensing Kit gives operators state-specific checklists and policy templates instead of starting from zero.
How do I start a group home if I have no experience running a facility?
Most states require the administrator or owner-operator to complete a state-approved training course, sometimes called a residential care administrator certification, before the license is issued, so lack of hands-on experience isn't automatically disqualifying if you complete required training. Some states also require a minimum number of hours working in a licensed facility, or a college degree in a health or human services field, before you can serve as the administrator of record. Others allow you to hire a qualified administrator while you own the business. Check your specific state's administrator requirements before assuming either path is available to you. Realistically, plan for a learning curve on three fronts: the regulatory paperwork (policies, incident reports, plans of correction), the operational side (staffing schedules, payroll, resident intake), and the physical property side (fire code, ADA-type accessibility, maintenance). Shadowing an existing licensed operator, if your state allows it, or working part-time as direct care staff before you open your own home, is one of the most practical ways to close that gap. There is no legitimate shortcut that guarantees approval; every state application goes through its own review and inspection regardless of what training or template you use.
What kind of staffing does a group home need?
Staffing requirements depend entirely on the license type and the acuity of residents, but nearly every state sets a minimum staff-to-resident ratio, required awake-overnight coverage in homes with residents who have behavioral or medical needs, and a minimum number of annual training hours per staff member (often covering topics like medication administration, first aid/CPR, abuse reporting, and behavior management). A 4-bed IDD group home with residents who have significant support needs might require awake staff 24/7 plus a higher staff-to-resident ratio than a senior residential assisted living home where residents are more independent. Direct care staff turnover is also a real operational issue: data on direct care worker turnover in long-term care settings nationally is not perfectly tracked, so treat any specific turnover percentage you see online with some skepticism and ask your state association or trade group for the most current regional numbers. Build your staffing plan around the acuity of your specific resident population first, then check it against your state's minimum ratios; the state minimum is a floor, not necessarily what's safe for your actual residents.
How does zoning affect where you can open a group home?
Zoning determines whether a residential neighborhood allows a group home at all, and federal fair housing law limits how restrictive local zoning can be toward group homes for people with disabilities. The federal Fair Housing Act, as amended in 1988, prohibits housing discrimination based on disability and generally requires municipalities to make "reasonable accommodations" in zoning rules to allow group homes for people with disabilities in residential areas [7]. That doesn't mean zero local regulation is allowed; cities can still enforce reasonable spacing requirements between group homes, occupancy limits tied to safety code, and standard building/fire code, but outright bans on group homes in residential zones have repeatedly been challenged and struck down in federal court under the FHA. Before you sign a lease or make an offer on a property, pull the local zoning code, call the planning department directly, and ask specifically whether a group home for your population is a permitted use, a conditional use, or not addressed at all. Getting this wrong after you've already invested in a property is one of the most expensive mistakes new operators make.
Frequently asked questions
What is assisted living?
Assisted living is a state-licensed residential care option for people, usually older adults, who need help with daily activities like bathing, dressing, and medication management but don't need full-time skilled nursing care. It combines housing with personal care services and is licensed and inspected at the state level, not federally certified like nursing homes.
What is a group home?
A group home is a licensed residential home, typically housing a small number of unrelated residents, where staff provide supervision and support. Group homes serve various populations including people with intellectual/developmental disabilities, mental illness, or those in addiction recovery, and licensing requirements and terminology differ significantly from state to state.
What is an assisted living facility?
An assisted living facility is the licensed building and business that provides assisted living services. It must pass a state pre-licensing inspection, meet fire and building code, and follow state rules on staffing, resident assessments, and service plans before it can legally operate and accept residents.
What does assisted living provide?
Assisted living typically provides housing, meals, housekeeping, laundry, social activities, medication management, and help with daily living tasks like bathing and dressing. It does not typically provide skilled nursing care, rehabilitation therapy, or hospital-level medical monitoring; those needs generally require a nursing home instead.
What is the difference between assisted living and a nursing home?
Assisted living helps with daily living activities in a home-like setting and is licensed at the state level. A nursing home provides 24-hour skilled nursing and medical care and must meet federal staffing rules under 42 CFR Part 483, including a registered nurse on duty at least 8 hours daily.
Does Medicare cover assisted living facilities?
No. Medicare does not cover room and board or personal care at assisted living facilities because that's classified as custodial care. Medicare can cover a short-term stay in a certified skilled nursing facility after a qualifying hospital stay, but that's a different, time-limited benefit under different rules.
How do I start a group home?
Pick your license category based on the population you'll serve, confirm local zoning allows it, write required policy manuals, pass background checks and fire/building inspections, and submit your application with fees to your state licensing agency. Timelines and requirements vary heavily by state, so confirm specifics with your agency before committing to a property.
How much does it cost to open a group home?
Costs vary enormously by state, license type, and whether you're leasing or buying property, so there's no single honest national figure. Budget for state application fees, background check fees, fire code upgrades, staff training, and insurance, and confirm exact fee schedules with your specific state licensing agency before finalizing a budget.
Is a group home the same as assisted living?
Not exactly. Group home is a broader term covering residential care for many populations and age groups, while assisted living is a specific state license category mostly for older adults needing help with daily living. Some group homes and assisted living facilities look similar physically, but they're licensed under different rules and agencies.
Who regulates group homes?
Each state's health department or human services agency (the exact agency name varies) issues and enforces group home licenses. There is no single federal group home license; requirements, inspections, and enforcement come entirely from state (and sometimes county) regulators, so confirm the correct agency for your state and population type.
Can Medicaid pay for a group home or assisted living?
Medicaid generally doesn't cover room and board, but many states offer Home and Community-Based Services (HCBS) waivers that help pay for personal care services in group homes or assisted living settings. CMS describes these waivers as a way to help Medicaid beneficiaries live in the community instead of an institution; check your state's specific waiver programs.
What's the difference between a group home for adults with disabilities and a nursing home?
A group home for adults with disabilities focuses on daily living support, skill-building, and community integration, often licensed under a state's developmental disabilities agency. A nursing home provides 24-hour skilled medical and nursing care under federal certification rules, and residents typically have significant ongoing medical needs a group home isn't equipped to manage.
Do group home operators need a special license or certification to run the facility?
Most states require the administrator or owner-operator to complete a state-approved training or certification course before a license is issued, and some require prior work experience or a relevant degree. Requirements differ by license type and state, so confirm the administrator qualification rules with your specific licensing agency before applying.
Sources
- CDC National Center for Health Statistics, Residential Care Community data: Median assisted living community size and services data
- California Department of Social Services, RCFE Administrator Certification: California requires a licensed RCFE administrator certification
- eCFR, 42 CFR Part 483 Subpart B, Requirements for Long Term Care Facilities: Federal nursing home staffing requirement of 8 consecutive hours of RN coverage daily
- Medicare.gov, Long-Term Care: Medicare doesn't cover custodial/long-term care such as assisted living room and board
- Medicare.gov, Skilled Nursing Facility Care coverage: Medicare Part A skilled nursing facility coverage limits and copay structure
- Medicaid.gov, Home & Community-Based Services: HCBS waivers help Medicaid beneficiaries live in the community instead of an institution
- U.S. Department of Justice, Fair Housing Act protections and group homes: Fair Housing Act requires reasonable accommodation in zoning for group homes for people with disabilities