How to start a group home: the full state-by-state playbook

Last updated 2026-07-25

what is a group home

A group home is a licensed residence, usually a single-family style house, where a small number of people (often 4 to 16, though limits vary hugely by state and program type) live together and receive supervision, personal care, or behavioral support from paid staff. Group homes serve very different populations: people with intellectual and developmental disabilities (IDD), adults recovering from mental illness or substance use, youth in foster care systems, and seniors who need help with daily activities but not full nursing care. The term gets used loosely, but licensing agencies draw sharp legal lines between categories. A home licensed for IDD adults under a state's developmental disabilities code is a completely different license, with different staffing ratios and different inspection standards, than a home licensed as assisted living for seniors. Confirm with your state licensing agency which category your intended population and services actually fall under before you write a single policy page, because the wrong license type can mean starting the paperwork over from zero. Most group homes are small (6 beds or fewer) specifically because many states set a lower regulatory bar, sometimes even exempting homes below a certain size from certain zoning restrictions under fair housing law. That threshold effect is a real driver of the classic '6-bed group home' business model you see in almost every state.

what is assisted living

Assisted living is a state-regulated residential care model for adults, mostly older adults, who need help with activities of daily living like bathing, dressing, medication reminders, and meals, but who do not need the 24-hour skilled nursing care of a nursing home. According to the National Center for Health Statistics, residential care communities (the federal survey term that includes assisted living) housed roughly 850,000 residents nationally in the most recent data cycle ^[1]. Assisted living is not one federal program with one definition. Each state writes its own licensing category (commonly called 'assisted living,' 'residential care facility,' 'personal care home,' or 'adult care home' depending on the state), sets its own resident-to-staff ratios, and inspects under its own rules. That is why two 'assisted living facilities' 50 miles apart in different states can look nothing alike on paper even though the marketing brochures look identical. If you are building a senior-focused home rather than an IDD or behavioral health home, read our companion guide on assisted living licensing requirements before you pick a state to launch in, since some states cap new licenses through moratoriums or certificate-of-need rules.

what is an assisted living facility (and how is it different from a group home)

An assisted living facility is the licensed building and business, more than the care model. The state issues the license to a specific address and a specific operator, and that license does not transfer if you sell the building or move the program down the street. Depending on the state, you might see the exact regulatory term 'assisted living facility,' 'residential care facility for the elderly,' or 'adult foster care home.' Group home is the broader, more informal umbrella term. An assisted living facility is technically a type of group home for seniors, but the reverse isn't always true: a group home for adults with IDD, for example, is licensed under a completely different chapter of state code, often the state's Department of Developmental Services or equivalent rather than the aging or health department. For a plain-language walkthrough of what regulators mean by the licensed term, see our page on assisted living facility definitions and requirements, and the related entry on assisted living facilities licensing by state. CMS itself does not license assisted living facilities at all; licensing is entirely a state function, which is a big part of why there is no single national rulebook to follow ^[2].

what is assisted living vs nursing home (and what does assisted living provide)

Regulator	State licensing agency	State + federal (CMS)
Nursing care	Limited, not 24-hr RN required	24-hr licensed nursing
Typical resident need	Help with ADLs, supervision	Medical/rehab care
Medicare coverage	Generally not covered	Covered for short-term skilled stays
Medicaid coverage	Varies by state waiver	Covered under state Medicaid plan	What does assisted living provide day to day? Typically: three meals, housekeeping, medication reminders or administration (depending on state rules on who can administer meds), personal care assistance, social activities, and 24-hour staff presence for supervision and emergencies, though not 24-hour nursing.

Assisted living provides help with daily living tasks, medication management, meals, and social supervision in a residential, non-medical setting. A nursing home (skilled nursing facility) provides 24-hour licensed nursing care, rehabilitation therapy, and medical monitoring for people who need clinical treatment, more than help with daily routines. The practical difference shows up in staffing and regulation. Nursing homes are certified under federal Medicare/Medicaid rules and must meet specific nurse staffing requirements under 42 CFR Part 483 ^[3], including having a registered nurse on duty for at least 8 consecutive hours a day, 7 days a week. Assisted living facilities are licensed purely at the state level and generally are not required to have an RN on site around the clock; staffing is set by each state's own residential care regulations instead. | Feature | Assisted living | Nursing home |

does medicare cover assisted living facilities

No. Medicare does not cover the room-and-board or personal care costs of assisted living. Medicare.gov states plainly that Medicare does not pay for 'assisted living, adult day care, or long-term care in an assisted living facility' as a general rule ^[4]; it may pay for short-term skilled nursing or home health visits that happen to be delivered while someone lives in assisted living, but not the facility's own care or housing charges. Medicaid is a different story, and this matters enormously for anyone planning to open a home that will accept Medicaid residents. Most states use Medicaid Home and Community-Based Services (HCBS) waivers, authorized under Section 1915(c) of the Social Security Act, to pay for personal care services in residential settings, while room and board is usually paid separately by the resident's own income (often Supplemental Security Income) ^[5]. If your business plan depends on Medicaid-funded residents, you need a Medicaid provider agreement and, in many states, a separate HCBS waiver enrollment on top of your basic operating license, which is its own multi-month application process.

how to start a group home: the step-by-step order of operations

Starting a group home is not one application, it is a sequence of separate approvals that have to happen mostly in order. Skipping ahead (buying a property before confirming zoning, for instance) is the single most common expensive mistake first-time operators make. 1. Pick your population and license category (IDD, mental health, adult foster care, senior residential care) and confirm the correct regulatory agency and chapter of code with your state licensing office. 2. Form your legal business entity (LLC or corporation) and get an EIN from the IRS. 3. Write your core policy and procedure manual, staffing plan, emergency/evacuation plan, and resident rights disclosures, since most states require these as part of the initial application packet, not after you open. 4. Find and secure a property that meets your state's physical plant rules (bedroom size minimums, bathroom ratios, sprinkler and fire code) and your local zoning code. 5. Submit your license application, background check (FBI/state fingerprinting) paperwork for owners and key staff, and required fees to the state agency. 6. Pass your fire marshal inspection and health/environmental inspection. 7. Pass the state's pre-licensing survey, where a surveyor walks the physical building and reviews your policy manual and staff files before issuing the license. 8. Hire and train staff to the state's minimum ratios and required training hours before your first resident moves in. 9. If you plan to accept Medicaid residents, apply separately for a Medicaid provider number and any required HCBS waiver enrollment. Most states publish an actual checklist PDF for this; find your state's Department of Health, Department of Social Services, or Department of Developmental Disabilities licensing page and search for 'group home,' 'residential care,' or 'adult foster care' licensing checklist. As one example of how detailed these can get, California's Community Care Licensing Division requires a completed application, a facility sketch, fire clearance, and a criminal record clearance for every adult living or working in the home before a license is even reviewed ^[6].

how do i start a group home if I have never operated one before

First-time operators without prior facility management experience usually face two extra hurdles: a required administrator qualification, and a longer state review because your file has no operating history to compare against. Many states require the home's designated administrator or 'qualified intellectual disabilities professional' to hold a specific credential, degree, or a set number of hours of state-approved training before the license will be issued, so check that requirement before you assume you personally can run the day-to-day. It genuinely helps to work or volunteer in an existing licensed home first, even part time, before you apply. Surveyors can tell the difference between a policy manual copied from a template and one written by someone who has actually run a shift. If you don't have that background, budget real time (more than money) for a state-approved pre-licensing training course; several states require this by name in their regulations rather than leaving it optional. A one-time reference kit can shortcut the drafting work for policy manuals, staffing plans, and application checklists, which is the piece that eats the most hours for new operators. GroupHomePath's $299 State Group Home Licensing Kit is built around this exact sequence; you can start building your state-specific packet at /licensing-kit-builder. No kit or consultant can guarantee approval, though; the state surveyor makes that call, not a template.

what does the property and zoning process actually require

Zoning is where more group home projects die than any other single step. Many states' group home statutes include fair housing protections that require single-family zones to treat small group homes (often defined as 6 or fewer unrelated residents) the same as any other family residence, but the exact resident cap and protections vary by state and by local ordinance, so this is a place to get a local zoning determination in writing, not to assume. Beyond zoning, expect physical plant requirements that go well beyond a normal home inspection: minimum square footage per bedroom, maximum residents per bedroom, at least one bathroom per certain number of residents, accessible egress routes, smoke detectors and often a full fire sprinkler system depending on resident mobility and state fire code, and a fire marshal sign-off before the state will schedule its own inspection. If you are buying or leasing a property, get the zoning letter and fire marshal pre-inspection done before you sign anything long-term. Retrofitting an existing house for ADA-width doorways or a sprinkler system after purchase can cost far more than the property itself in some markets, and that number varies too widely by region to quote a single figure honestly here.

what staffing and training requirements should i plan for

Staffing rules are set entirely at the state level and vary by population type, but nearly every state requires a minimum staff-to-resident ratio around the clock, documented staff training hours (often including CPR/first aid, medication administration, abuse reporting, and behavior management for IDD or mental health homes), and criminal background checks for every staff member and, often, every household member living on site. Budget for turnover. Direct care work in residential settings has historically high turnover; the President's Committee for People with Intellectual Disabilities and multiple state workforce studies have flagged direct support professional turnover as a persistent, systemic problem in this field, which means your staffing plan needs a real training pipeline, more than an initial hiring push. Write your staffing plan as if a surveyor will read it literally, because they will. State inspectors typically want to see named shift coverage, a written on-call/backup plan for call-outs, and proof of training completion dates in each staff file, more than a policy statement that says 'adequate staffing will be maintained.'

what does the application and inspection process look like once you apply

Once your application, fees, and background checks are submitted, expect a licensing specialist to review the paperwork first, then schedule a physical pre-licensing inspection of the home once the paper review is complete. Timelines vary by state and by how busy the licensing office is, so treat any specific week-count you hear from a consultant as a guess, not a guarantee, and ask your state agency directly for their current average processing time. The pre-licensing survey typically checks the physical building against code, reviews resident record templates and staff files, verifies fire and health inspection sign-offs are on file, and interviews the administrator about emergency procedures. Some states also require a 'mock' resident intake or tabletop emergency drill before final approval. After licensing, expect ongoing surveillance. Our inspections coverage on this site walks through what surveyors actually check on annual and complaint-driven visits, and it is worth reading before your first inspection, not after a citation.

how much does it cost to start a group home

There is no honest single number here because licensing fees, property costs, and staffing costs vary enormously by state, city, and population served, and anyone who quotes you one flat startup figure for 'a group home' nationally is guessing. What you can budget for with more confidence are the fee categories every state charges: an initial application fee (often a few hundred dollars, though some states charge per-bed fees instead), a fingerprint/background check fee per person, a fire inspection fee charged by the local fire authority, and a license renewal fee due annually or biennially depending on the state. On top of state fees, plan for the property (purchase, lease, or retrofit costs), insurance (general liability plus, in many states, a specific residential care or professional liability policy), staffing before your first resident moves in, and any required administrator training or certification course fees. Confirm current fee schedules directly with your state licensing agency's published fee page, since these numbers change and a stale figure online is worse than no figure at all.

assisted living at home and other alternative models

Not every operator wants to build a traditional multi-bed facility from scratch. Some states license smaller-scale, in-home models, sometimes called adult foster care or adult family homes, where a caregiver provides paid residential care for a small number of residents (often 1 to 5) inside their own home rather than a purpose-built facility. Our page on assisted living at home covers how that license category differs from a standard multi-bed assisted living facility, including generally lighter staffing and building requirements in exchange for a much smaller resident capacity. If you are researching this because you're trying to find care for a family member rather than open a business, our directory-style guide on senior assisted living facilities near me is written for that search instead, and it will save you time versus this operator-focused article.

Frequently asked questions

What is assisted living in simple terms?

Assisted living is a state-licensed residential setting for adults, usually seniors, who need help with daily tasks like bathing, dressing, and medications but don't need 24-hour nursing care. It combines housing, meals, and personal care support in one licensed facility, regulated entirely by each state rather than by one federal standard.

What is a group home exactly?

A group home is a licensed residence where a small number of people, often 4 to 16 depending on the state and license type, live together and receive supervision or care from paid staff. It's an umbrella term covering IDD homes, mental health homes, recovery homes, and senior assisted living homes, each licensed under different state rules.

What is an assisted living facility versus a general group home?

An assisted living facility is the specific licensed building and business serving seniors under a state's aging or health department code. A group home is the broader term that also includes IDD, mental health, and recovery homes, each licensed under a different state agency and different regulatory chapter.

What is the difference between assisted living and a nursing home?

Assisted living provides help with daily living tasks in a residential setting without 24-hour licensed nursing care. A nursing home provides round-the-clock skilled nursing and medical care under federal Medicare/Medicaid certification rules, including a required registered nurse presence for at least 8 hours a day per 42 CFR Part 483.

Does Medicare cover assisted living facilities?

No. Medicare.gov states Medicare generally does not pay for assisted living, room and board, or long-term custodial care in a residential facility. Medicare may cover short-term skilled nursing or home health visits received while someone happens to live in assisted living, but not the facility's own care charges.

Does Medicaid pay for group homes or assisted living?

In many states, yes, through Home and Community-Based Services (HCBS) waivers authorized under Section 1915(c) of the Social Security Act, which can cover personal care services in a residential setting. Room and board is typically paid separately from the resident's own income, often Supplemental Security Income, not by Medicaid directly.

How do I start a group home from scratch?

Pick your population and license category, form a legal business entity, write your policy and staffing manuals, secure a property that clears zoning and fire code, submit your state license application with background checks and fees, pass fire and health inspections, and complete the state's pre-licensing survey before accepting residents.

How long does it take to get a group home licensed?

Timelines vary widely by state, license type, and how complete your initial application is, commonly running several months to about a year. There's no reliable national average because each state agency sets its own review queue and inspection scheduling; ask your specific state licensing office for their current processing timeline.

How much does it cost to open a group home?

Costs vary too much by state, city, and population type to quote one honest national figure. Expect state application fees, per-person background check fees, fire inspection fees, property or retrofit costs, insurance, and staffing costs before your first resident moves in. Confirm exact fee schedules with your state licensing agency.

Do I need a special license for a group home for people with disabilities?

Yes. A group home serving adults with intellectual or developmental disabilities is typically licensed under a different state agency and code chapter than a senior assisted living facility or a mental health residential program. Confirm the correct license category with your state licensing agency before writing your policies or securing a property.

Can I run a group home out of my own house?

Some states license smaller in-home models, often called adult foster care or adult family homes, that allow paid residential care for a small number of residents (commonly 1 to 5) inside the caregiver's own home. Requirements are generally lighter than a multi-bed facility but still require state licensing and inspection.

What staffing ratio do group homes need?

Staffing ratios are set by each state and vary by population type and resident acuity; there is no single national ratio. Nearly all states require documented round-the-clock coverage, minimum training hours (CPR, medication administration, abuse reporting), and background checks for every staff member. Confirm exact ratios with your state's licensing regulations.

Sources

1. CDC National Center for Health Statistics, Long-Term Care Providers and Services Users: residential care communities house roughly 850,000 residents nationally
2. CMS.gov, Nursing Home Compare / Medicare & Long-Term Care: assisted living facilities are licensed at the state level, not by CMS
3. eCFR, 42 CFR Part 483 Subpart B, Requirements for Long Term Care Facilities: skilled nursing facilities must have an RN on duty at least 8 consecutive hours a day, 7 days a week
4. Medicare.gov, Long-term Care coverage: Medicare generally does not cover assisted living or long-term custodial care
5. Medicaid.gov, Home & Community-Based Services 1915(c): states use 1915(c) HCBS waivers to fund personal care services in residential settings
6. California Department of Social Services, Community Care Licensing Division: California requires a criminal record clearance for every adult living or working in a licensed care home before license review