Last updated 2026-07-25
TL;DR
Most states require a group home owner to pass a criminal background check, complete state-approved training, submit floor plans and fire/health inspections, and file a licensing application with a nonrefundable fee (often $200 to $2,000+). Exact rules depend on the population served (IDD, mental health, senior RAL) and are set by your state licensing agency, not the federal government.
What is a group home, exactly?
A group home is a licensed residential setting where a small number of people, usually between 4 and 16 depending on the state, live together and receive some level of support, supervision, or care. The label covers a lot of ground: adult foster care homes, intermediate care facilities for people with intellectual or developmental disabilities (IDD), mental health residential facilities, substance use recovery homes, and residential assisted living (RAL) homes for seniors all fall under some version of "group home" in casual conversation. What they share is the licensing structure. A group home is not a private house where a family member happens to be caring for a relative. It is a business, licensed by a state agency (usually the department of health, department of social services, or department of aging), subject to inspection, staffing ratios, and a written policy manual that governs everything from medication handling to fire drills. The specific name and rules change by state and by population. Some states license "adult family homes," others license "community-based residential facilities," others use "assisted living residences." If you're comparing options, start with the assisted living facility overview to see how the terminology maps to your state's actual license category.
What is assisted living?
Assisted living is a type of licensed residential care for adults, usually seniors, who need help with daily activities like bathing, dressing, medication reminders, and meals but do not need the round-the-clock skilled nursing care a nursing home provides. Assisted living residences are licensed at the state level, not federally, so the exact services allowed and the staffing required differ from state to state. The Centers for Medicare & Medicaid Services (CMS) does not license or directly regulate assisted living; licensing is a state function. CMS itself notes that "Medicare doesn't cover room and board while getting hospice care, in an assisted living facility, or nursing home" [1], which tells you something important: assisted living sits outside the federal nursing home survey and certification system that governs Medicare-certified facilities. In practice, an assisted living residence looks like an apartment building or converted large home with private or semi-private rooms, a shared dining area, staff on-site around the clock (though not necessarily nurses), and a care plan for each resident. It is a licensed business, and the license is what group home owner requirements are really about.
What is an assisted living facility (and how is it different from a nursing home)?
| Licensing authority | State only | State + federal (CMS) | |
|---|---|---|---|
| Medicare coverage | Not covered for room and board [1] | Covered for short-term skilled care under Part A, with conditions [3] | |
| Staffing | Direct care aides, medication aides; RN/LPN not always required 24/7 | Licensed nurses required around the clock | |
| Typical resident | Needs help with ADLs, largely independent otherwise | Needs ongoing medical/nursing care | |
| Federal inspection | No | Yes, standard survey every 9-15 months [4] | If you're deciding which license path fits your plan, compare the population you intend to serve against your state's category definitions before you draft a business plan. The assisted living hub page breaks down how states typically split these categories. |
An assisted living facility is the physical building and licensed operation providing assisted living services, as described above. A nursing home (also called a skilled nursing facility, or SNF) is a different, more intensive category, licensed to provide 24-hour skilled nursing care, rehabilitation services, and medical supervision, and it is the setting that is federally certified for Medicare and Medicaid reimbursement under 42 CFR Part 483 [2]. The practical difference an owner needs to understand: nursing homes are certified by CMS and surveyed under federal rules with a public inspection record; assisted living facilities are licensed only by the state, with no federal certification layer. That means the requirements to open and run each are governed by completely different rulebooks, fee schedules, and inspection bodies. | Feature | Assisted living facility | Nursing home (SNF) |
What does assisted living provide?
Assisted living typically provides help with activities of daily living (bathing, dressing, toileting, mobility), medication management or reminders, meals, housekeeping, laundry, social and recreational activities, and 24-hour staff availability for safety. It does not typically provide skilled nursing care, ventilator management, or the level of medical monitoring a nursing home offers, though some states allow a higher "enhanced" or "limited nursing" license tier for residents with moderate medical needs. What's actually required to be provided is set by your state's licensing regulations, not by industry convention. Some states mandate a minimum number of recreational activity hours per week; others mandate specific staff-to-resident ratios during waking and sleeping hours. Some require a licensed administrator on-site during business hours; others only require one on payroll. Before you write your policy manual, get the actual regulation text from your state licensing agency. Don't build your program off a competitor's brochure or a national franchise's marketing page. What's allowed under one state's license may be explicitly prohibited under another's, especially around medication administration by unlicensed staff.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for room and board or the custodial care that makes up most of what assisted living provides. CMS is explicit that Medicare does not cover the cost of living in an assisted living facility [1]. Medicare Part A and Part B may still pay for medical services a resident receives while living there (a doctor visit, physical therapy, durable medical equipment), but the rent and personal care portion is the resident's or family's responsibility, or is covered through other means. Some states use Medicaid Home and SHCBS (Home and Community-Based Services) waivers to pay for a portion of the personal care and services delivered in assisted living or group home settings, even though room and board still isn't covered by Medicaid either in most cases. Medicaid.gov describes these waivers as allowing states to "furnish an array of home and community-based services that assist beneficiaries to live in the community" rather than in an institution [5]. If your business model depends on residents paying through Medicaid HCBS waivers, that is a separate approval process from your basic operating license, usually run through your state Medicaid agency, and it can take months longer to get approved as a Medicaid provider than to get your basic residential license. Budget for that timeline separately, and don't assume your state license automatically makes you a Medicaid billing provider.
How to start a group home: the requirements in order
There's no single national checklist because licensing is a state function, but nearly every state's group home owner requirements follow the same sequence. Here's the order that actually works, based on how state licensing statutes are typically structured. 1. Pick your population and license category (IDD, mental health, adult foster care, senior assisted living, recovery residence) because this determines which agency and which rule chapter applies to you. 2. Confirm zoning. Your property has to be zoned for a group living use, or you need a conditional use permit or reasonable accommodation request under the Fair Housing Act. Check with your local planning department before you sign a lease or purchase agreement. 3. Pass owner/operator screening. Nearly every state requires a criminal background check (state and often FBI fingerprint-based) for the owner, administrator, and direct care staff, plus checks against state abuse and neglect registries. 4. Complete required training or certification. Many states require the administrator to hold a specific credential (an assisted living administrator license, a developmental disabilities administrator certificate, etc.) with a set number of pre-service training hours, commonly in the range of 20 to 80 hours depending on the state and license type, plus annual continuing education. 5. Prepare the physical plant. This means meeting building and fire code for a group living occupancy (often a change from a single-family residential fire code), passing a health department inspection for food handling if you serve meals, and meeting minimum square footage per resident and bedroom occupancy limits. 6. Write your policy and procedure manual. States require written policies covering medication management, emergency and disaster planning, resident rights, admission and discharge criteria, staffing plans, and abuse reporting procedures, often referencing specific statute sections you must cite in your manual. 7. Submit the license application and fee. Application fees vary widely, commonly somewhere between $200 and $2,000 depending on the state and facility size, and many states also charge a separate per-bed fee. 8. Pass the pre-licensing inspection. A state surveyor visits before your license is issued to confirm the building, staffing, and paperwork match what you submitted. Building this packet from scratch, state statute by state statute, is the single biggest time sink for first-time operators. That's the exact gap the $299 State Group Home Licensing Kit is built to close: state-specific application checklists, policy manual templates, and staffing plan templates so you're not starting from a blank page.
What background checks and screening does a group home owner need?
Almost every state requires a criminal history background check for the owner, the administrator, and all direct care staff before a license is issued and before an employee has unsupervised contact with residents. Most states use fingerprint-based checks run through the state police or a state-designated vendor, cross-referenced with the FBI's national database, and many also check state abuse, neglect, and exploitation registries and the federal List of Excluded Individuals/Entities maintained by the HHS Office of Inspector General for anyone excluded from federal health programs. Disqualifying offenses typically include crimes against persons (assault, abuse, neglect), financial exploitation crimes, and certain drug offenses, though most states have a look-back period and a process for requesting a waiver or exemption if the offense is old and the person has demonstrated rehabilitation. Don't assume a past conviction automatically disqualifies you; check your specific state's waiver process before giving up on the plan. Owners with a business partner or co-investor should confirm whether every person with an ownership stake above a certain percentage (commonly 5% or more) also has to go through screening, since many states require disclosure and background checks for anyone with significant financial control, more than the person managing daily operations.
What staffing and training does a group home need to have?
Staffing requirements are set as ratios (residents per staff member) that usually get stricter overnight and for higher-acuity populations. A senior assisted living home might require one staff member awake per 15 to 20 residents during the day and one awake overnight staff regardless of census; an IDD group home with residents who have significant behavioral support needs might require a 1:3 or even 1:1 ratio around the clock. These numbers vary enormously by state and by license tier, so treat any number you read online, including this one, as a starting point to confirm against your actual state regulation. Training requirements usually stack in layers: general orientation training for all new hires (often 8 to 16 hours, covering resident rights, emergency procedures, and reporting abuse), population-specific training (dementia care, developmental disabilities, mental health crisis de-escalation), and administrator-level training or certification that can run 40 to 80 hours plus a state exam. CPR and first aid certification for at least one staff member on every shift is close to universal. Medication administration is where states diverge the most. Some states let trained, unlicensed staff administer medication under a medication aide certification program; others require a licensed nurse to handle all medication administration, which changes your staffing budget and hiring pool significantly. Confirm this early, because it affects whether you can staff the home with certified nursing assistants or whether you need a licensed nurse on payroll or on call.
What does the physical building need to meet code?
The building has to be approved for a group living or residential care occupancy classification under your state's adopted building and fire code, which is usually based on the International Building Code (IBC) or NFPA 101 Life Safety Code, not the single-family residential code your house was built under. This typically means fire-rated separation walls, a monitored fire alarm system, sprinklers above a certain resident count (commonly triggered at 6 residents or more in many state fire codes, though this threshold varies), two means of egress from sleeping areas, and emergency lighting. Minimum bedroom square footage per resident and maximum residents per bedroom are also regulated; a common baseline is around 80 square feet for a single-occupancy bedroom and 60 to 70 square feet per person in a shared room, though these numbers differ by state. Bathroom-to-resident ratios, accessible route requirements under the Americans with Disabilities Act (ADA) for facilities serving people with disabilities, and kitchen commercial-grade equipment requirements (if you're preparing meals for more than a small household count) round out the physical plant checklist. Get your local fire marshal and building department involved before you sign a lease. A building that looks perfect on paper can fail the change-of-occupancy inspection because of something as simple as door swing direction or a missing fire-rated door between the garage and living space.
What zoning and property requirements apply to a group home?
Zoning is one of the most common places first-time operators get stuck, mostly because they assume any residential zone works. Group homes for people with disabilities are protected under the federal Fair Housing Act, which the Department of Housing and Urban Development (HUD) and Department of Justice have interpreted to require reasonable accommodations that allow a group home to operate in a residential zone even where local ordinance would otherwise restrict it, provided residents are considered a protected class under the Act (people with disabilities, for example). That protection doesn't mean zoning doesn't matter or that you can skip the local approval process. Many cities require a conditional use permit, a spacing requirement between group homes (some states or cities cap density, like requiring group homes to be a certain distance apart), and neighborhood notification. Call your local planning and zoning office before signing a lease, not after. For a deeper walkthrough on how zoning classifications, occupancy limits, and conditional use permits interact with state licensing, see the assisted living facilities guide, and if you're considering a smaller-scale, at-home model, assisted living at home covers how that structure differs from a standalone facility license.
What paperwork and policies does a licensing agency actually require?
Beyond the application form itself, licensing agencies typically require a written policy and procedure manual covering: admission and discharge criteria, resident rights and grievance procedures, medication management, emergency and disaster preparedness (including evacuation plans specific to your building), infection control, abuse and neglect reporting protocols, staffing plans with backup coverage, and a financial disclosure or surety bond showing you can operate solvently. Many states also require proof of liability insurance at a specified minimum coverage level, a signed lease or deed showing site control, floor plans stamped or reviewed by the fire marshal, and references or a criminal background clearance letter for every owner and administrator listed on the application. Application review timelines commonly run 30 to 90 days once a complete packet is submitted, though incomplete applications or a backlog at the agency can extend that considerably; don't count on a fast turnaround when you're planning your lease start date or hiring timeline. Expect a licensing fee, which varies by state and facility size (commonly in the low hundreds to a couple thousand dollars), and in many states a separate annual renewal fee and periodic re-inspection fee. None of these fees guarantee approval; they cover the cost of the agency reviewing and inspecting your application.
Frequently asked questions
What is assisted living?
Assisted living is a state-licensed residential care option for adults, usually seniors, who need help with daily activities like bathing, dressing, and medication management but don't need full-time skilled nursing care. It combines housing, meals, and personal care services under one roof, with staff on-site around the clock, though staffing does not usually include 24-hour licensed nurses the way a nursing home does.
What is a group home?
A group home is a licensed residential setting where a small number of people live together and receive supervision or support, covering categories like adult foster care, IDD group homes, mental health residences, recovery homes, and senior assisted living. It is a licensed business regulated by a state agency, not an informal family caregiving arrangement.
What is an assisted living facility?
An assisted living facility is the licensed building and operation where assisted living services are delivered: private or semi-private rooms, shared dining, staff support with daily activities, and medication assistance. It is licensed at the state level only; there is no federal certification for assisted living the way there is for nursing homes under CMS.
What is the difference between assisted living and a nursing home?
Assisted living provides help with daily living activities and is licensed only by the state; nursing homes provide 24-hour skilled nursing and medical care and are both state-licensed and federally certified by CMS for Medicare/Medicaid participation, with standard surveys roughly every 9 to 15 months under federal rule.
What does assisted living provide?
Assisted living typically provides help with bathing, dressing, mobility, and toileting, medication reminders or administration (depending on state rules), meals, housekeeping, laundry, social activities, and 24-hour staff availability. It generally does not provide skilled nursing, ventilator care, or intensive medical monitoring; those require a nursing home level license.
Does Medicare cover assisted living facilities?
No. CMS states Medicare doesn't cover room and board in an assisted living facility. Medicare may still pay for covered medical services a resident receives there, like doctor visits or physical therapy, but the housing and personal care cost is paid out of pocket, through long-term care insurance, or in some cases through a state Medicaid HCBS waiver.
How do I start a group home?
Pick your population and license category, confirm local zoning allows the use, pass owner and staff background checks, complete required administrator training, get your building through fire and health inspection, write a compliant policy manual, and submit your license application with fee to your state licensing agency. Expect the full process to take several months from lease signing to license issuance.
What background check does a group home owner need to pass?
Most states require a fingerprint-based state and FBI criminal history check for the owner, administrator, and direct care staff, along with checks against state abuse/neglect registries and, for Medicaid-participating facilities, the HHS Office of Inspector General's exclusion list. Look-back periods and waiver processes for old convictions vary by state.
How much does it cost to get a group home license?
Licensing fees vary by state and facility size, but application fees commonly fall between $200 and $2,000, sometimes with an added per-bed charge and a separate annual renewal fee. This is separate from the cost of meeting building code, staffing, and insurance requirements, which usually costs far more than the fee itself.
Do I need a special license to run a group home from my own house?
In most states, yes, if you're providing paid care to non-family members you don't live with as family, even in your own home. Some states have a separate, lighter-touch license category for smaller adult family homes (often capping at 3 to 6 residents) with reduced building requirements compared to larger facilities; check your state licensing agency for the specific category.
What staffing ratio does a group home need?
Ratios depend on the population and state: senior assisted living might require one awake staff member per 15 to 20 residents in the day and one overnight regardless of census, while an IDD home with high behavioral support needs might require 1:3 or 1:1 staffing around the clock. Confirm the exact ratio in your state's licensing regulation before building a staffing budget.
Can a group home be denied a license because of zoning?
Yes, if the property isn't zoned for group residential use and no conditional use permit or Fair Housing Act reasonable accommodation applies. Group homes for people with disabilities have some federal protection under the Fair Housing Act, but local spacing rules, notification requirements, and permit processes still apply, so confirm zoning before signing a lease.
Sources
- CMS, Assisted Living: Medicare doesn't cover room and board in an assisted living facility
- eCFR, Requirements for States and Long Term Care Facilities, 42 CFR Part 483: Federal requirements governing nursing homes under Medicare/Medicaid certification
- Medicare.gov, Skilled Nursing Facility Care: Medicare Part A covers short-term skilled nursing care under specific conditions
- CMS, State Operations Manual, Nursing Home Survey Process: Nursing homes undergo standard federal surveys on a recurring cycle
- Medicaid.gov, Home & Community-Based Services: Medicaid HCBS waivers allow states to fund community-based services as an alternative to institutional care