How to Start a Group Home in Delaware: Licensing, Zoning, and Staffing

To start a group home in Delaware, you need a license from the Division of Health Care Quality (DHCQ) within the Department of Health and Social Services, and you need to pick the right facility classification before you do anything else, because the rules, capacity limits, and staffing requirements branch from that choice. If your home will serve people with intellectual or developmental disabilities and bill Medicaid, you’ll run a second, parallel authorization process through the Division of Developmental Disabilities Services (DDDS). Local zoning is a third track that often matters more than operators expect. Operating without a license carries civil penalties up to $10,000 per violation, so none of these steps are optional.

Step 1: Pick the Right Facility Classification

Delaware’s long-term care statute, Title 16, Chapter 11, defines several residential categories, and each one is governed by a different administrative code. Choose wrong and you’ll be following the wrong rulebook.

A Neighborhood Home serves up to five people with intellectual or developmental disabilities in a community-integrated setting with 24-hour support. Governed by 16 DE Admin. Code 3310.
A Group Home for Persons with Mental Illness serves three to ten adults with a primary psychiatric diagnosis, providing 24-hour mental health treatment, rehabilitation, and housing. Governed by Code 3305.
A Family Care Home provides beds and personal care for two or three residents in a family-style setting. Governed by Code 3315.
A Group Home for Persons with AIDS serves up to 16 individuals whose disease progression requires routine physician, nursing, and supportive services. Governed by Code 3301.

Each home at a separate address needs its own license. Licenses do not transfer between locations or between providers.¹

Step 2: Form Your Business Entity and Get an EIN

Register a legal business entity with the Delaware Division of Corporations. Most group home operators form an LLC or a corporation. The name on your state registration must match the name on your DHCQ application exactly; mismatches slow things down.

Then apply for a federal Employer Identification Number through the IRS. The online application issues the number immediately. Faxing Form SS-4 typically takes about four business days; mailing it to IRS EIN Operations in Cincinnati takes roughly four weeks.² Apply online unless you have a reason not to.

Step 3: Prepare the Property

The physical building has to meet specific standards before DHCQ will license it. For neighborhood homes under Code 3310:

Single-occupancy bedrooms must be at least 100 square feet.
Shared bedrooms need at least 80 square feet per person, with beds spaced at least three feet apart. No bunk beds, and no more than two people per bedroom.
Ceilings must average at least seven feet. Any area where the ceiling drops below five feet doesn’t count toward the room’s square footage.
Common living space must be at least 150 square feet for the first occupant plus 100 square feet for each additional occupant.

The property also needs working smoke detectors, adequate lighting, temperature controls, water temperatures set to prevent scalding, and posted emergency contact information and evacuation routes. The home must be smoke-free.

Two outside approvals are prerequisites to the state license: a Certificate of Occupancy from your local building department confirming the structure is approved for residential care use, and a written report from the Delaware State Fire Marshal confirming the property meets fire safety codes for a residential care facility. Both go into your application package.

Step 4: Assemble the Application Package

The DHCQ application distinguishes between the licensee (the entity that owns the home) and the administrator (the person running daily operations). Both must be identified. The forms live on the DHCQ website.⁴ Your package needs:

An operating budget. The state uses it to assess whether you can sustain operations; it is explicitly required for homes serving people with mental illness.¹
Professionally drafted floor plans showing bedroom dimensions, common areas, and bathrooms, demonstrating compliance with the space requirements for your facility type.
The Certificate of Occupancy.
The State Fire Marshal approval.
A certification that the provider will comply with all applicable state and federal laws.

Background Checks

Delaware requires criminal background checks for applicants and anyone with a significant ownership interest in the facility. The Department can charge up to $500 as a background examination fee for initial applications to cover the cost.⁵ Disqualifying crimes involving violence or financial exploitation of vulnerable adults will result in denial. Finish all clearances before you submit; missing clearances are one of the most common reasons applications stall.

License Fees

Group homes, neighborhood homes, and family care homes all have 16 or fewer beds, so they fall into the “all other facilities” category under § 1106, with a total license fee of $50 for both initial and renewal licenses.⁵ Budget separately for the background examination fee of up to $500.

Step 5: The Inspection and Your Provisional License

Once your application clears the completeness review, DHCQ schedules a pre-licensing on-site inspection. State surveyors walk the entire property and check it against your submitted floor plans and fire safety documentation. They look at room dimensions, smoke detectors, lighting, temperature controls, furniture, and posted emergency information. Significant deficiencies mean delays or denial.

New applicants get a provisional license first, not a full annual license. For group homes serving people with mental illness, the provisional license lasts 90 days; meeting all requirements during that window converts it to an annual license valid for up to 12 months.¹ Neighborhood homes work similarly: the initial license is issued when the first resident moves in and runs six months, with a follow-up inspection during that period. Passing that inspection earns an annual license for the remainder of the licensure year.³

After full licensing, every facility is inspected at least annually. The Department can also inspect unannounced at any time, and state law prohibits giving advance notice unless the Secretary of DHSS authorizes it.⁶ Renewal applications are due at least 90 days before the current license expires.

Step 6: Confirm Local Zoning Before You Sign a Lease

The hurdle that catches new operators off guard isn’t paperwork. It’s zoning. Federal law gives you strong protection: the Fair Housing Act prohibits local governments from treating a residential property occupied by people with disabilities differently from the same property occupied by an unrelated family. A city or county cannot single out group homes for special zoning restrictions, conditional use permits, or spacing requirements that don’t apply to other households.⁷

The Act also requires local governments to make reasonable accommodations in zoning rules when necessary to give people with disabilities equal housing opportunities. If an ordinance technically bars your use, you can request a reasonable accommodation and the municipality must grant it unless doing so would fundamentally alter the zoning scheme. In Sussex County, for example, a group residential facility serving 10 or fewer people with disabilities is classified as a single-family dwelling under the county zoning code, meaning it’s permitted wherever single-family homes are. Most Delaware municipalities take a similar approach, but check your local code before signing a lease. A zoning fight discovered after the fact is expensive to unwind.

Step 7: Build Your Staffing and Training

Staffing minimums depend on facility type and resident needs. Neighborhood homes must have at least one staff person on duty at all times when residents are present, plus a nurse on call around the clock for consultation. At least one on-duty staff member must be trained in first aid and CPR. Beyond the minimum, staffing has to match the needs documented in each resident’s person-centered plan; if your residents have complex medical or behavioral needs, regulators will expect more staff.³

Group homes for people with mental illness have tighter rules. From 8 a.m. to 10 p.m., at least one clinician or associate clinician must be on-site for every one to five residents. When six or more residents are present, at least two staff must be on-site with at least one being a clinician or associate clinician. Overnight, at least one clinician or associate clinician must remain on-site. At least 75 percent of the home’s staff, including the residence manager, must be clinicians or associate clinicians.¹

Medication Administration Training

If unlicensed staff will help residents with medications, each one must complete a Board of Nursing-approved Limited Lay Administration of Medications (LLAM) core curriculum, plus any program-specific module, before administering anything.⁸ The facility also files an annual compliance report with the Board of Nursing by August 1 each year.

Food Service

Neighborhood homes must serve at least three meals every 24 hours, with no more than 14 hours between the evening meal and breakfast unless a suitable snack is provided in between. Keep a three-day supply of food and water on hand at all times.³

Step 8: Insurance Before You Open

Delaware regulations require providers to carry liability insurance as required by state law, and any vehicle used to transport residents must have liability coverage meeting Delaware DMV standards.¹ Beyond the minimum, most operators carry general liability, professional liability, and property insurance. Medicaid contracts and DDDS provider agreements typically require proof of adequate coverage before enrollment is finalized, so get quotes early and build premiums into your operating budget.

Step 9: Enroll as a DDDS Medicaid Provider (If Serving the IDD Population)

If your neighborhood home will serve individuals with intellectual or developmental disabilities, you’ll almost certainly need to enroll as a Medicaid Home and Community-Based Services provider through DDDS. That’s where the funding comes from for most residents. The authorization is separate from and in addition to your DHCQ license, and runs in four phases:

Phase 1 — Information gathering. Review the DDDS Provider Standards and the Neighborhood Home Regulations, then watch the required information session videos on the DDDS website.
Phase 2 — Application. Submit the application with supporting documentation. DDDS runs a completeness review, a budget review for financial stability, and a content review by the Authorized Provider Committee. Applications scoring 80 points or higher on content review advance to a formal interview.
Phase 3 — Medicaid enrollment and RFP. Approved providers enroll through the state’s web-based Medicaid system and respond to a DHSS Request for Proposals. You have two full quarterly cycles to complete the RFP process or you lose authorization and must wait six months to reapply.
Phase 4 — Final approval. After Medicaid enrollment, RFP award, and a mandatory DDDS orientation, you meet with the DDDS Office of Business Supports and Services to finalize your contract and set billing rates.

⁹

If an application is returned for deficiencies, you have 30 days to resubmit a corrected version. Miss the deadline and you wait six months to apply again. Existing providers adding new services must meet at least 86 percent of the Provider Compliance Checklist criteria to be in “substantial compliance.”

What Will Get Your License Pulled

The penalties for cutting corners are real. Operating without a license carries a civil penalty of up to $10,000 per violation. Under § 1109, the Department can also impose:

Between $2,000 and $20,000 per violation for serious health and safety threats.
Up to $10,000 per violation for other regulatory issues.
Each day of a continuing violation counted separately, capped at $5,000 per day beyond the first for health and safety issues and $2,500 per day for other issues.

⁶

DHCQ can suspend or revoke a license for deficiencies that threaten resident health and safety, for allowing illegal activity on the premises, or for refusing surveyors access to the facility.³ Reportable incidents must go to DDDS immediately and to DHCQ within eight hours. Slow or missing reports are the fastest way to put a license in jeopardy. Retaliating against a resident or employee for filing a complaint carries its own civil penalty of up to $10,000 per violation.⁶

1
Delaware Regulations. Delaware Administrative Code Title 16 3305 – Group Homes for Persons with Mental Illness
2
Internal Revenue Service. Employer Identification Number
3
Delaware Regulations. Delaware Administrative Code Title 16 3310 – Neighborhood Homes for Persons with Developmental Disabilities
4
Business First Steps. Long Term Care Facilities
5
Justia. Delaware Code Title 16 Chapter 11 Section 1106 – License Fees
6
Delaware Code Online. Delaware Code Title 16 Chapter 11 – Long-Term Care Facilities and Services
7
Office of the Law Revision Counsel. 42 USC 3604 – Discrimination in the Sale or Rental of Housing
8
Justia. Delaware Code Title 24 Section 1932 – Limited Lay Administration of Medications
9
Delaware Department of Health and Social Services. DDDS Provider Application Manual