Last updated 2026-07-25
TL;DR
Starting a group home in Texas means choosing the right license category (assisted living, HCSSA, or an IDD/behavioral health program) through the Texas Health and Human Services Commission, meeting facility and staffing rules, passing a pre-licensing inspection, and often clearing local zoning first. Expect months of lead time, not weeks.
What is a group home, exactly?
A group home is a residential setting, usually a house in an ordinary neighborhood, where a small number of unrelated people live together and get some level of supervision or personal care. The term gets used loosely. In practice it covers a range of very different licensed operations: adult foster care homes, small assisted living facilities, homes for people with intellectual or developmental disabilities (IDD), and residential recovery or mental health homes. Texas doesn't have one single "group home license." Instead, the Texas Health and Human Services Commission (HHSC) regulates several distinct categories depending on who lives there and what care they need. If your home will serve seniors who need help with bathing, dressing, or medication, you're probably looking at an Assisted Living Facility license under Texas Health and Safety Code Chapter 247 [1]. If you're serving people with IDD, you may fall under HHSC's Home and Community-based Services (HCS) or Intermediate Care Facility (ICF/IID) programs instead [2]. This distinction matters more than almost anything else in this article. Pick the wrong category and you'll redo paperwork, staffing plans, and possibly construction. Call HHSC's Long-Term Care Regulatory division before you sign a lease or make an offer on a house, and confirm which license type actually matches your population.
What is assisted living, and what does an assisted living facility provide?
Assisted living is a residential care model for adults, usually seniors, who need help with daily activities like bathing, dressing, medication reminders, and mobility, but don't need the round-the-clock skilled nursing care of a hospital or nursing home. An assisted living facility (ALF) provides housing, meals, help with activities of daily living, some medication management, and staff supervision, all in a home-like or apartment-style setting rather than a clinical one. In Texas, assisted living facilities are licensed under 26 TAC Chapter 553 and Health and Safety Code Chapter 247 [1][3]. The state actually splits ALFs into Type A and Type B based on the residents' needs. Type A facilities house residents who are physically and mentally capable of following instructions during an emergency and evacuating without help. Type B facilities house residents who need staff assistance to evacuate, including people who are non-ambulatory or have cognitive impairment. Type B comes with tighter staffing and physical plant requirements because the risk profile is higher. If you're building out a small home-based facility (sometimes called a small ALF or "three-bed" home in industry shorthand, though Texas doesn't cap it at three), you'll still need to meet the same core licensing standards as a large facility. Texas doesn't offer a lighter-touch license just because the home is small. Read our related breakdown of assisted living facility licensing basics if you're still deciding whether ALF is the right category for your project.
What is assisted living vs nursing home? What's the actual difference?
The core difference is the level of medical care and the regulatory framework. Assisted living is a personal-care and supervision model regulated as residential care; a nursing home (skilled nursing facility) is a medical care model that provides 24-hour nursing care under a physician's orders, regulated more like a small hospital. In Texas, nursing facilities are licensed separately under Health and Safety Code Chapter 242 and must have licensed nurses on duty around the clock [4]. Assisted living facilities are not required to have a registered nurse on-site at all times; staffing depends on facility type and resident acuity, but the model assumes residents are more independent than nursing home residents. Cost and payer source track this difference too. Nursing homes bill Medicaid and Medicare for skilled care in a lot of cases. Assisted living is overwhelmingly private-pay in Texas, with some help available through the state's Medicaid HCS waiver or STAR+PLUS managed care program for people who qualify, but there's no dedicated federal assisted living benefit the way there is for nursing home skilled care [5]. If you're trying to decide which model to build toward, that payer reality should shape your business plan from day one, not as an afterthought once you've already picked a building.
Does Medicare cover assisted living facilities?
No. Medicare does not cover the room and board or personal care costs of assisted living. CMS is explicit about this: Medicare Part A and Part B cover medically necessary services like doctor visits, hospital stays, and some home health care, but they do not pay for long-term custodial care, including assisted living rent or aide assistance with daily activities [6]. Medicare will sometimes pay for a skilled nursing stay after a qualifying hospital stay, and it may cover medical services (like a visiting nurse or physical therapist) delivered to someone who happens to live in an assisted living facility. But the facility's monthly rate itself is not a Medicare-covered expense. Medicaid is a different story, though still limited. Texas Medicaid does not pay for room and board in assisted living, but some residents may get help with the cost of care services through STAR+PLUS or an HCS/ICF waiver slot, depending on eligibility and waiver availability [5][7]. Waiver waitlists in Texas can run years long for some programs, so don't build a business plan that assumes quick Medicaid waiver reimbursement will fill your beds.
How do I start a group home in Texas? The step-by-step process
Here's the realistic sequence, in the order that actually saves you money and time. 1. Pick your population and license category. Decide whether you're serving seniors (ALF), people with IDD (HCS or ICF/IID), people with mental illness, or people in recovery. Each has a different HHSC program and different rules. 2. Confirm zoning and property eligibility before you buy or lease. Call the city or county planning department and ask directly whether a licensed residential care home is a permitted use at the address you're considering. Some Texas cities treat small group homes as by-right single-family use under fair housing accommodations; others require a special use permit. Don't assume; get it in writing if you can. 3. Draft your policies and procedures manual. HHSC will want to see written policies covering admissions, medication management, emergency preparedness, staff training, resident rights, and incident reporting before it will license you. 4. Build your staffing plan. Match required staff-to-resident ratios and qualifications to your license type (more below). 5. Submit your license application to HHSC Long-Term Care Regulatory, along with the required fee. Application requirements and forms are posted on the HHSC provider licensing pages [8]. 6. Pass your pre-licensure inspection. An HHSC surveyor will walk the physical plant, check life safety code items (fire extinguishers, exits, smoke detectors), and review your policy manual and staff files. 7. Get your fire marshal sign-off. Most Texas residential care licenses require a local fire marshal or state fire marshal inspection confirming the building meets applicable life safety standards for the resident population. 8. Receive your license and open. Some categories require a provisional or initial license period before full licensure. Budget real time for this. Between zoning confirmation, property prep, policy writing, staff hiring, and the HHSC review cycle, six months from a standing start to a license in hand is a reasonable planning assumption for most first-time Texas operators, and it can run longer if your building needs renovation to meet fire and life safety code.
What license type do I actually need in Texas?
| Population served | Texas license/program | Regulating division | Typical setting | |
|---|---|---|---|---|
| Seniors needing personal care, ADLs | Assisted Living Facility (Type A or B), HSC Ch. 247 | HHSC Long-Term Care Regulatory [1] | Home-based or larger facility | |
| Seniors needing 24-hr skilled nursing | Nursing Facility, HSC Ch. 242 | HHSC Long-Term Care Regulatory [4] | Licensed nursing facility | |
| Adults with IDD, community setting | Home and Community-based Services (HCS) waiver provider | HHSC IDD Services [2] | Small group home, 3-4 residents typical | |
| Adults with IDD, facility-based | Intermediate Care Facility (ICF/IID) | HHSC Long-Term Care Regulatory [2] | Licensed ICF | |
| Adults in mental health recovery | Varies; may fall under HHSC behavioral health licensure or be unlicensed "recovery residence" depending on services offered | HHSC / DSHS Behavioral Health | Home-based | |
| Adult foster care | Adult Foster Care program (Medicaid-connected) | HHSC | Family-style home, small number of residents | This table is a starting map, not a final answer. Confirm with your state licensing agency which category applies to your specific resident population and the services you plan to provide, because overlapping situations (say, seniors with both dementia and a psychiatric diagnosis) can require you to meet more than one set of rules at once. |
What are the staffing requirements for a Texas group home?
Staffing rules depend entirely on your license type, and this is one of the areas where operators most often underbudget. For Type A and Type B assisted living facilities, Texas rules under 26 TAC Chapter 553 require an awake staff member on-site whenever residents are in the facility unless residents are specifically assessed as not needing supervision, plus a designated administrator who meets training and, for larger facilities, licensure or certification requirements [3]. Type B facilities generally require higher staff awareness because residents may need help evacuating. For HCS and ICF/IID group homes, staffing ratios are tied to each resident's individual service plan and level of need, so a home with higher-acuity residents will need more staff hours per resident than a home serving people who are largely independent [2]. Across every category, plan for background checks on all staff (Texas requires criminal history checks through the Department of Public Safety and, in most cases, the HHSC Employee Misconduct Registry check before hire), CPR/first aid certification, and documented initial and ongoing training hours. Build your first-year staffing budget assuming turnover; direct care work in residential settings has real turnover, and a staffing plan that only works if every hire stays a year is not a plan, it's a hope.
What does the Texas group home inspection process look like?
Expect at least two inspections before you open: a life safety/fire inspection and a licensing survey from HHSC. After you're licensed, expect recurring unannounced surveys, typically annually, plus complaint-driven inspections if anyone reports a concern. The HHSC surveyor will check your physical plant against the applicable minimum standards (exits, smoke detectors, sprinkler requirements where applicable, bedroom square footage per resident, bathroom-to-resident ratios), review resident records and care plans, check staff files for required training and background checks, and interview residents and staff. Deficiencies get cited on a statement of deficiencies, and you'll typically have a set period to submit a plan of correction. Don't treat the pre-licensure inspection as a formality. Walk your own building against the published minimum standards before the surveyor ever shows up. It's far cheaper to fix a doorway width or a missing fire extinguisher yourself than to get cited, resubmit paperwork, and push your opening date back another few weeks.
What should go in my policies and procedures manual?
HHSC expects a written manual covering, at minimum: admission and discharge criteria, medication management and storage, emergency preparedness and evacuation procedures, resident rights and grievance procedures, staff training and supervision plans, infection control, incident and injury reporting, and record-keeping. This manual isn't busywork. Surveyors will ask to see it during your licensing inspection, and they'll check whether your actual practice matches what the manual says you do. A beautiful manual that nobody on staff has actually read is worse than a plain one that your staff can recite back, because a surveyor interview mismatch (staff describing a different process than the manual states) is its own citation risk. If you're building this from scratch, a state-specific starting template saves real time over drafting from a blank page, especially for the sections tied to Texas-specific citations (Chapter 247, Chapter 553, or your specific HCS/ICF program rules). That's the gap our $299 State Group Home Licensing Kit is built to close: state-specific policy manual templates and application checklists so you're not reinventing a medication management policy that HHSC has already told you, implicitly, exactly what it needs to contain.
What about zoning? Can I open a group home in a residential neighborhood?
In many cases, yes, but you have to confirm it locally. Texas law and federal fair housing law both matter here. The federal Fair Housing Act generally requires cities to make reasonable accommodations allowing small group homes for people with disabilities in residential zones, and many Texas municipalities have local ordinances reflecting that. But "generally allowed" is not the same as "automatically approved." Some cities cap the number of unrelated residents allowed in a single-family zone, require a special use permit above a certain occupancy, or apply different rules depending on whether the home serves people with disabilities (protected) versus, say, unrelated young adults with no disability (not protected the same way). Fire code, parking requirements, and separation distances from other group homes can also apply locally. Call your city or county zoning office before you commit to a property. Ask specifically: "Is a licensed [assisted living / HCS group home / whatever your category is] a permitted use at this address, and is any permit or hearing required?" Get the answer in writing or the name of the person who told you, and keep that record. If zoning becomes a fight, you'll want documentation of what you were told and when.
How much does it cost to start a group home in Texas?
There's no single number, because it depends heavily on whether you're buying or leasing property, how much renovation the building needs to meet fire and life safety code, and which license category you're pursuing. Real cost drivers include: property acquisition or lease-up costs, renovation to meet ADA and fire code requirements (sprinklers, exit widths, bathroom modifications), HHSC application and licensing fees (confirm current fee amounts on the HHSC provider fee schedule, as these are set by rule and do change), staff wages and required training, background check fees per employee, liability insurance, and your policy manual and administrator training/certification costs if your license type requires a certified administrator. Most of these costs are front-loaded before you ever collect your first resident payment, which is why cash flow planning matters as much as the licensing paperwork itself. Underestimating the renovation and staffing runway is the single most common reason first-time operators run out of money before they open.
Frequently asked questions
What is assisted living?
Assisted living is residential care for adults, usually seniors, who need help with daily activities like bathing, dressing, and medication but don't need 24-hour skilled nursing care. It combines housing, meals, and personal care support in a home-like setting, licensed in Texas under Health and Safety Code Chapter 247 and 26 TAC Chapter 553.
What is a group home?
A group home is a residential setting where a small number of unrelated people live together with some level of supervision or care. In Texas, the term covers several distinct licensed categories, including assisted living facilities, IDD group homes under HCS or ICF/IID, and adult foster care, each with its own rules.
What is an assisted living facility?
An assisted living facility (ALF) is a licensed residential setting providing housing, meals, supervision, and help with activities of daily living for adults who don't need round-the-clock nursing care. Texas licenses ALFs as Type A or Type B depending on whether residents can evacuate independently in an emergency.
What is the difference between assisted living and a nursing home?
Assisted living provides housing and personal care support without full-time nursing staff; a nursing home provides 24-hour skilled nursing care under physician orders. Texas licenses them under different chapters (247 for assisted living, 242 for nursing facilities), and nursing homes accept more Medicaid/Medicare skilled-care billing than assisted living does.
Does Medicare cover assisted living facilities?
No. Medicare does not pay for assisted living room, board, or personal care costs. It may cover medically necessary services delivered to someone living in assisted living, like a visiting nurse, but the facility's monthly rate itself is not covered under Medicare Part A or Part B, per CMS guidance.
How do I start a group home in Texas?
Pick your license category (assisted living, HCS/ICF for IDD, or another HHSC program), confirm local zoning allows it, write your policy manual, build a compliant staffing plan, submit your HHSC application and fee, pass your fire and licensing inspections, then open once licensed. Budget around six months minimum for the full process.
How much does it cost to start a group home in Texas?
Costs vary widely based on property, renovation needs, and license type, and there's no single published statewide figure. Major cost drivers include real estate, fire/life safety renovations, HHSC application fees (check the current HHSC fee schedule), staff wages, background checks, and insurance. Budget a real cash runway before you accept your first resident.
Do I need a special license for a small home-based assisted living facility in Texas?
Texas doesn't offer a reduced-requirement license just because a facility is small. A home-based assisted living facility must still meet the same Type A or Type B standards under 26 TAC Chapter 553 as a larger facility, including staffing, physical plant, and inspection requirements.
Can Medicaid pay for a resident's care in a Texas assisted living facility?
Texas Medicaid generally does not cover assisted living room and board. Some residents may access help with care costs through STAR+PLUS managed care or an HCS/ICF waiver, depending on eligibility and waiver slot availability, but waitlists for some Texas waiver programs run years long.
What's the difference between assisted living vs nursing home in terms of staffing?
Nursing homes must have licensed nurses providing skilled care around the clock under Health and Safety Code Chapter 242. Assisted living facilities require awake staff supervision appropriate to resident needs but not continuous licensed nursing coverage, since the model assumes lower medical acuity.
Do I need a fire marshal inspection to open a group home in Texas?
Yes, in almost every case. Residential care licenses in Texas typically require sign-off from a local or state fire marshal confirming the building meets applicable life safety code requirements for the resident population before HHSC will issue a license.
How long does it take to get a group home license in Texas?
There's no guaranteed timeline, but six months from choosing a license type to opening day is a reasonable planning assumption for a first-time operator. Renovation needs, HHSC review queues, and zoning approval can each add delay, so build buffer time into your opening date.
Sources
- Texas Health and Safety Code, Chapter 247 (Assisted Living Facilities): Assisted living facilities in Texas are licensed under Health and Safety Code Chapter 247
- Texas HHSC, Intellectual and Developmental Disabilities Services: HHSC regulates HCS and ICF/IID programs for people with intellectual and developmental disabilities
- Texas Administrative Code, 26 TAC Chapter 553 (Licensing Standards for Assisted Living Facilities): Texas divides assisted living facilities into Type A and Type B with distinct staffing and physical plant requirements
- Texas Health and Safety Code, Chapter 242 (Nursing Facilities): Nursing facilities in Texas are licensed separately under Health and Safety Code Chapter 242 with 24-hour nursing care requirements
- Texas HHSC, STAR+PLUS Program: STAR+PLUS is a Texas Medicaid managed care program that can help cover care services for eligible people
- Medicare.gov, Long-Term Care coverage: Medicare does not cover long-term custodial care such as assisted living room and board
- Texas HHSC, Home and Community-based Services (HCS) Program: HCS waiver eligibility and slot availability determine Medicaid support for IDD group home residents
- Texas HHSC, Long-Term Care Provider Licensing: HHSC Long-Term Care Regulatory publishes assisted living facility licensing application requirements and forms