The I/DD Residential Care Market in 2026

The US residential I/DD facility industry (NAICS 623210) generated an estimated $42.2 billion in revenue in 2026, up from $38.8 billion in 2024, growing at a 2.2% compound annual rate. IBISWorld, 2026 counts roughly 7,390 operating businesses nationally, and — critically for a new entrant — no single operator holds more than a 5% market share. This is a fragmented, locally-licensed industry, not one dominated by a handful of national chains competing on price.

Zoom out and the category is larger still. The global market for intellectual and developmental disability services — spanning residential care, day programmes, employment support and therapy — was valued at $286.4 billion in 2025 and is projected to reach $432.8 billion by 2033 (5.8% CAGR), with residential services the single largest segment at $93.8 billion (32.8% of global revenue) and North America commanding 42.1% of that global total. Dataintelo, 2025.

In England, LaingBuisson's Adult Specialist Care report (2025) puts learning disability and autism spend at £8.8 billion — the single largest line item inside a £19.0 billion UK adult specialist care market (£15.2 billion in England alone) that supports over 750,000 adults, 81% of it funded through local authorities and 14% through the NHS. Only 5% is private-pay, which is the single most important underwriting fact for anyone building a UK financial model: your customer is effectively the commissioner, not the resident's family.

The structural trend worth building a plan around: the share of I/DD care spend going to residential settings has fallen from 38% (2014/15) to 32% (2023/24) as commissioners shift budget toward supported living. A plan that only proposes a traditional group home, without addressing how it will adapt to or complement supported-living commissioning, reads as out of date to a UK funder in 2026.

On the ownership side, the sector has attracted significant private-equity capital over the past decade. STAT News reported in March 2025 that Blue Wolf Capital-owned RHA Health Services controls roughly 42% of licensed I/DD beds in North Carolina, and that Sevita — formerly National MENTOR, now under Centerbridge ownership and recently expanded through its acquisition of ResCare Community Living from BrightSpring Health Services — is one of the largest home- and community-based I/DD operators in the country. That consolidation is exactly why an independent, community-rooted operator wins on responsiveness, family relationships and state-specific compliance knowledge that a multi-state platform struggles to replicate at every site.

What's Driving Demand

Three structural forces sit behind the growth numbers above and belong in your plan's market section, not just the headline figures. First, an ageing caregiver population: a large share of adults with I/DD in the US still live with a family caregiver over 60, and every year that cohort ages out of caregiving, a wave of new placement demand hits state waiting lists. Second, most states report multi-year waiting lists for HCBS waiver slots — several states report waits measured in years rather than months — which is both the demand signal and the reason states are actively courting new licensed providers rather than protecting incumbents. Third, the continued shift away from large institutional settings toward smaller, community-integrated homes (4-6 beds) means the addressable opportunity for a new small operator is genuinely growing even as larger legacy institutions close or downsize. A plan that cites the local waiting-list figure for your specific county or state DD board is far more persuasive to a lender than a national statistic alone.

Quick Answers Buyers Search For

Before the deep-dive sections below, here are direct answers to the questions people actually type into Google before they start writing a plan.

How much does it cost to open a group home for adults with disabilities?

Between $75,000 and $500,000+ in the US depending on whether you lease or purchase the property. Operators who lease an existing accessible home and pass licensing inspection on the existing structure can launch closer to the $50,000–$80,000 end; those building out or purchasing a purpose-fit property should plan for $200,000 and up.

Can I get an SBA loan to open a residential I/DD facility?

Yes. NAICS 623210 (Residential Intellectual and Developmental Disability Facilities) carries an SBA small-business size standard of $19 million in average annual receipts, which means almost every new operator qualifies for SBA 7(a) financing. Lenders will want a facility-specific pro forma tied to your actual state reimbursement rate — not a generic template.

What's the fastest licensing path — group home or ICF/IID?

A state-licensed, HCBS waiver-funded group home is almost always faster to launch (roughly 3–6 months) than seeking CMS ICF/IID Medicaid certification, which adds a formal federal survey process and typically runs 6–12 months. Most first-time operators start with the waiver-funded group home model and consider ICF/IID certification later if their state's reimbursement makes it worthwhile.

What insurance does a residential I/DD facility need?

At minimum: general and professional liability, abuse and molestation coverage (a standard, non-optional rider in this sector given the vulnerability of residents), workers' compensation, commercial auto if you transport residents, and property/business-interruption cover on the home itself. UK operators should budget public liability at a minimum of £5 million as most local- authority commissioning contracts specify that floor before they'll place a resident with you. Insurance underwriters in this category will typically ask for your staffing ratios and incident- reporting process before quoting — another reason a documented operations plan matters before you shop for cover.

Startup Costs & Funding Options

Launching a licensed I/DD group home or ICF/IID typically requires $75,000 to $500,000+ in the US, or roughly £60,000 to £400,000 in the UK once you include CQC compliance spend, property, and working capital. The single biggest swing factor is whether you lease an already-accessible property or purchase and retrofit one — that decision alone can move total capital required by a factor of four.

Funding Routes

In the US, SBA 7(a) loans (up to $5M, terms to 25 years on real estate) remain the default route — NAICS 623210's $19M SBA size standard means virtually every new-entrant facility qualifies. Our bespoke business plan service builds SBA-compliant financials with the facility's actual state Medicaid rate baked into the projections, not a generic revenue assumption.

In the UK, the Start Up Loans scheme (up to £25,000 at 6% fixed, with free mentoring) covers a fraction of a residential launch and is usually paired with a commercial property loan or a specialist care-sector lender who understands CQC-regulated cash flow. Similar programmes exist through Canada's BDC and Australia's NDIS-aligned finance providers for Specialist Disability Accommodation (SDA) builds.

If you're planning something broader than a single licensed residential facility — a multi-service I/DD organisation spanning day programmes, employment support and residential care — start from our mental retardation business plan template instead, which covers the wider organisational structure this page's facility-specific model doesn't.

Some states and most managed-care contracts also expect, or explicitly favour, providers that hold accreditation from a recognised body such as CARF International (Commission on Accreditation of Rehabilitation Facilities) or The Joint Commission. Accreditation isn't a licensing requirement in most states, but naming it as a Year 2 or Year 3 milestone in your operations plan signals to a lender or referral partner that you're building toward a recognised quality bar, not just the minimum bar required to open the doors.

Staffing, Wages & Direct Support Professionals

Direct support professionals (DSPs) are the largest line item in almost every I/DD facility's cost structure, typically 55–70% of operating expenses once payroll taxes and mandatory training are included. Getting the staffing model right in your plan is not optional — under-staffing is the single most common reason a facility fails a CMS or CQC compliance survey.

There is a quirk worth knowing for your plan's labour cost citations: the US Bureau of Labor Statistics does not track "direct support professional" as its own Standard Occupational Classification code. DSP roles are instead folded into the broader Personal Care Aides (SOC 31-1122) and Home Health Aides (SOC 31-1121) categories in the BLS Occupational Employment and Wage Statistics. Third-party salary aggregators put the median DSP salary at roughly $39,795 nationally as of 2025, which sits close to the BLS-tracked wage bands for those two adjacent occupations — use it as a planning benchmark, but confirm your state's actual DSP wage floor, since several states now mandate a minimum DSP hourly rate tied to Medicaid rate-setting.

A realistic 8-bed staffing model for a waking-overnight facility typically needs 4-5 full-time- equivalent DSPs to cover three shifts plus PTO relief, one house manager, and a part-time or shared qualified intellectual disabilities professional (QIDP) to write and review individual support plans — a role ICF/IID certification specifically requires under the active-treatment standard covered in the licensing section below.

Most established operators standardise documentation, incident reporting and billing on a dedicated I/DD platform — Therap Services is the most widely used across US group homes and ICFs/IID — rather than building compliance workflows in spreadsheets. Your plan's operations section should name the system you intend to use; surveyors and lenders both read that as a sign of operational maturity.

Turnover is worth modelling as a real cost line, not an afterthought. Every DSP departure typically costs an operator somewhere between $3,000 and $5,000 once you account for overtime coverage, recruitment advertising, background-check fees, and the productivity gap while a replacement is trained to the individual support plans of each resident. At a national turnover rate regularly quoted above 40% annually, an 8-bed home running 4-5 FTE DSPs should budget for roughly two full replacement hires a year as a baseline planning assumption, not a worst case. Operators who invest in above-market starting wages, predictable scheduling, and a defined path from DSP to house manager consistently report lower turnover than the sector average — and a plan that shows this thinking reads as materially more investable than one that treats staffing as a fixed line item.

Recruitment channels that perform well in this sector include partnerships with local community colleges' human-services or CNA programmes, targeted listings on Indeed and state workforce boards, and referral bonuses paid to existing staff — direct-care hiring responds better to trusted referral networks than to generic job-board spend, since candidates who already understand the emotional demands of the role are far more likely to stay past the first 90 days.

Revenue Model & Reimbursement

Unlike most small businesses, revenue here is not consumer-priced — it is reimbursement-driven. Facilities are paid a daily or monthly rate set by a state Medicaid programme (either through an ICF/IID per-diem rate or an HCBS waiver service rate), and that rate varies enormously by state and by facility cost-report history. Recent state per-diem figures illustrate the spread: Florida's Medicaid ICF/IID rate runs roughly $180–$320 per day; Utah's routine ICF per diem is $250.93 ($260.64 including supplemental payments); and Indiana pays a certified CRMNF facility as much as $703.10 per resident-day for its higher-acuity designation.

Worked Example: An 8-Bed Facility

Take an 8-bed ICF/IID reimbursed at a blended $250 per resident-day rate — a conservative, mid-range figure relative to the state examples above — running at 90% average occupancy (allowing for admissions gaps and short hospital stays). That's 8 × $250 × 365 × 0.90 ≈ $657,000 in annual revenue. Applying the IBISWorld industry-average 11.1% profit margin gives roughly $73,000 in annual profit before owner draw. That thin margin on a single home is exactly why the strongest business plans in this category show a credible path to a second or third licensed home rather than promising outsized returns from one site — lenders and investors who work in this space know the real economics and will discount any plan that doesn't.

In the UK, the equivalent figure is a weekly local-authority placement fee negotiated per commissioning contract, typically supplemented by NHS Continuing Healthcare funding where a resident has qualifying health needs. Because 81% of UK adult specialist care spend is publicly funded, your financial model should be built around commissioner rate negotiations and framework-agreement pricing, not a market rate you set yourself.

Additional, smaller revenue lines worth modelling include respite-care day rates for existing residents' families, Medicaid transportation reimbursement where the facility provides it directly, and — in states that separate the two — a distinct day-programme or supported-employment fee stream if the facility also operates daytime services.

Worked Example: A UK Registered Home

A UK operator running a 6-bed CQC-registered home commissioned at a blended weekly placement fee of £1,450 per resident, at 90% occupancy across the year, generates 6 × £1,450 × 52 × 0.90 ≈ £407,300 in annual revenue. Staffing (typically 60-68% of revenue for a waking-night home with 1:2 or better daytime ratios), rent, utilities, food, training and insurance leave a similar single-digit-to-low-teens net margin to the US model above — which is exactly why UK providers increasingly pursue multi-home portfolios or blend residential care with supported-living contracts rather than relying on one site to carry the business.

Licensing & Regulatory Requirements

This is the section where sector-generic templates fail buyers completely — the compliance standards below are specific to residential I/DD care, not repurposed from an unrelated industry checklist.

United States

• State I/DD or group-home licence issued by the state Developmental Disabilities agency or state Medicaid office (requirements vary by state)
• CMS ICF/IID Medicaid certification under 42 CFR Part 483, Subpart I — required only if seeking the institutional ICF/IID benefit rather than an HCBS waiver
• Demonstrated "active treatment" under 42 CFR 483.440(a): documented, individualised programming designed to build skills and independence, not custodial care alone
• Compliance across all 8 CMS survey domains: governing body/management, client protections, facility staffing, active treatment services, client behaviour and facility practices, health care services, physical environment, and dietetic services
• Background checks, CPR/first aid, and state-mandated DSP training hours for all direct-care staff
• Fire, life-safety and building-code inspection specific to residential care occupancy

United Kingdom

• Register with the Care Quality Commission under the Health and Social Care Act 2008
• Demonstrate the "Right support, right care, right culture" standard specific to autism and learning disability services
• Complete mandatory Oliver McGowan training on autism and learning disability for all staff — an explicit registration requirement for applications submitted on or after 9 February 2026
• Provide accessible policies and procedures for the people you support (also mandatory from 9 February 2026)
• Size the home to CQC's stated preference — generally no more than 6 people, with well-supported single-occupancy accommodation
• Enhanced DBS checks for all staff; a Registered Manager who meets CQC's fit-and-proper-person requirements
• CQC strongly recommends a pre-application conversation before committing capital or signing a lease — do this before, not after, you finalise your site

Australia (NDIS)

Operators building Specialist Disability Accommodation (SDA) must register with the NDIS Quality and Safeguards Commission, pass a certification audit against the NDIS Practice Standards, hold current worker-screening clearances for all staff, and individually enrol each dwelling before it can receive SDA payments. Canada's provincial licensing (via each province's developmental services ministry) and comparable frameworks in the EU follow the same basic pattern — register the operator, then register the specific home.

If your plan is for a facility serving young people specifically rather than adults, licensing, staffing ratios and education-integration requirements differ meaningfully — see our youth group home business plan template for that variant instead of adapting this adult-facility model.

Why "State Requirements" Is Never a One-Line Answer

Every US state routes I/DD licensing through a different agency with its own application, survey cycle and terminology, and a generic "check your state requirements" sentence is exactly the kind of filler that makes a plan look unresearched. California licenses group homes through its regional centre system under the Department of Developmental Services; Texas routes ICF/IID and HCS (Home and Community-based Services) provider enrolment through the Health and Human Services Commission; Florida's Agency for Persons with Disabilities (APD) manages both waiver enrolment and group-home licensing; and Ohio's Department of Developmental Disabilities (DODD) certifies both residential providers and the individual DSPs who work in them. A credible plan names the specific state agency, its typical survey timeline, and — where public — its current waiver waiting-list length, rather than treating "licensing" as a single generic line item.

Common Mistakes First-Time Operators Make

• Modelling private-pay rates instead of the real reimbursement rate. Lenders will check your assumed per-diem against your state's published Medicaid fee schedule; a mismatch kills credibility instantly.
• Defaulting to ICF/IID certification when a waiver-funded group home licence would launch faster and cheaper. Only pursue full ICF/IID certification once you've confirmed your state's ICF/IID rate genuinely beats the equivalent waiver rate net of the extra compliance burden.
• Underestimating DSP turnover. National direct-care turnover regularly exceeds 40% annually; a plan that assumes stable staffing without a recruitment and retention budget will not survive an active-treatment compliance review.
• Skipping the CQC or state agency pre-application conversation. Sinking capital into a lease or purchase before confirming the site and model will pass registration is the single most common reason UK operators lose their initial investment.
• Sizing the home above the 4–6 resident threshold that most state frameworks and CQC now favour. Larger congregate settings face a harder registration path, slower fill rates, and — in England specifically — active commissioner preference against them.
• Treating the QIDP (Qualified Intellectual Disabilities Professional) role as an afterthought. ICF/IID certification requires documented, individualised active-treatment planning overseen by a qualified professional; plans that budget this as a token part-time line item routinely fail their first certification survey.

The common thread across all six mistakes is the same: treating this as a generic small-business launch rather than a reimbursement-funded, survey-regulated care operation. Every assumption in the plan — revenue, staffing, timeline, capital need — should trace back to a specific state rule or published rate, not an industry-average guess borrowed from an unrelated sector template.

Sample Business Plan Preview

Here's an extract from the kind of business plan our team builds — so you can see exactly what a lender-ready facility plan looks like, not a generic industry template.

What's in the Template

Every Avvale business plan template includes these sections, pre-structured for a residential I/DD facility:

• Executive Summary — Your facility at a glance, written to hook a lender or investor in 60 seconds
• Company Overview — Legal structure, ownership, site, and licensing pathway (waiver group home vs. ICF/IID)
• Industry Analysis — Market size, reimbursement trends, and the regulatory landscape covered above
• Client / Resident Analysis — Referral sources, acuity levels, and admission criteria
• Competitor Analysis — Local waiting-list dynamics and how you differentiate from existing providers
• Referral & Marketing Plan — Case-manager relationships, county DD board contacts, and family-referral channels
• Operations Plan — Staffing model, shift coverage, documentation platform, and compliance calendar
• Management Team — Founder background, QIDP arrangement, and advisory relationships

The optional Financial Forecast add-on (included in our $300/£250 and $1,000/£800 packages) provides a 5-year Excel model with income statement, cash flow, balance sheet, break-even analysis, and startup capital requirements — built around your actual state reimbursement rate, not a placeholder figure. For general business-plan writing support beyond this facility-specific template, see our business plan writer service.

Every section is written to survive scrutiny from the three audiences who will actually read it: an SBA underwriter checking your revenue assumption against the published state rate, a state licensing surveyor checking that your operational plan actually satisfies active-treatment or "right support, right care, right culture" language, and a family or case manager deciding whether to refer a resident to your home. Templates built for a generic service business fail all three tests at once; this one is built to pass them.

Frequently Asked Questions