Oregon Adult Foster Home: Licensing, Staffing, and Tax Rules

Opening an adult foster home in Oregon means getting a state license before a single resident moves in, and then running the home under a detailed set of rules that cover who you are, what the building looks like, how you staff it, and how you treat the people who live there. The Oregon Department of Human Services, through its Aging and People with Disabilities (APD) program and local Area Agency on Aging (AAA) offices, licenses these small residences, inspects them, and investigates complaints.¹ The core Oregon adult foster home requirements below apply to a residence serving up to five unrelated adults who are 65 or older or who have a physical disability.²

Who Qualifies to Apply

You must be at least 21 years old and either own, rent, or lease the home where care will be provided. Proof of ownership or a signed lease has to be submitted with your application.³

Every applicant and every person who lives in the home must clear a criminal background check through the Department’s Background Check Unit before the home can operate. That includes household members who will not be providing any care.⁴

Training is required before you provide care. Every provider and caregiver must complete the Department’s Caregiver Preparatory Training Study Guide and Workbook. If you will serve as the primary caregiver or hire a resident manager, you also have to pass the Department’s Ensuring Quality Care Course and examination. The Department can add training requirements at any time if it decides you need more to safely care for a particular resident.³

You also have to submit a Health History and Physician’s or Nurse Practitioner’s Statement confirming you are physically, cognitively, and emotionally able to provide care. Renew that statement every three years, or sooner if a health concern comes up.³

What the Home Itself Must Have

Bedrooms and Accessibility

Each resident bedroom needs at least 70 square feet of usable floor space for one person, or 120 square feet if two people share it. Every bedroom must have at least one window that opens and meets emergency egress standards, plus adequate ventilation, heating, and lighting.⁵

Doorways and all interior and exterior areas residents use must be wide enough for whatever mobility equipment those residents actually rely on, whether that’s a wheelchair, a walker, or something else. The rule does not set a fixed doorway width. Accessibility is judged against the needs of the people living in your home.⁵

Fire Safety

The Oregon Fire Code has an appendix dedicated to adult foster homes. Smoke alarms are required in every sleeping room, in adjacent hallways, in common living areas, and in the basement. Multi-level homes need an alarm at the top of each stairway. All alarms must be interconnected so activation in one sounds in every sleeping room, and if any resident is hearing impaired, you must install alarms designed for hearing-impaired individuals. Test smoke alarms monthly per the manufacturer’s instructions.⁶

At least one 2A:10BC fire extinguisher must be visible and readily accessible on each floor, including the basement. Every sleeping room needs at least one operable window or door approved for emergency escape. Hallways and exit paths must be at least 36 inches wide, and exit doors must have latching knob hardware with an obvious method of operation. Sliding bolts, hasps, and double-key deadbolts are prohibited on exit doors.⁶

Only ambulatory residents who can evacuate on their own may be housed on a second floor or in a basement. Lifts, elevators, and rope ladders do not substitute for the ability to walk stairs during an evacuation.⁶

Staffing the Home

You or a substitute caregiver must be on duty 24 hours a day whenever residents are in the home, and either you must live in the home or you must hire a resident manager who does.⁷ The licensee also has to keep enough qualified caregivers on staff, including awake staff when a resident’s needs call for it, to meet the around-the-clock needs of everyone in the home.⁸

Substitute caregivers have their own limits. A substitute routinely left in charge for more than 48 hours in a calendar week must meet the full education, experience, and training requirements of a resident manager. The rule is not meant to block a qualified substitute from covering a one- or two-week vacation, but it does stop providers from leaning on under-trained staff as a regular practice. If the primary caregiver will be gone for 10 or more days, notify the local licensing agency at least seven days ahead and submit a written staffing plan.⁸

Residency Agreements and Records

Before a resident moves in, sign a written residency agreement with the resident or their representative. It must spell out the services provided, the rate, the conditions under which rates can change, and the refund policies for hospitalization, temporary absence, death, or a move to another care setting. House policies on alcohol, tobacco, animals, marijuana use on the premises, and meal schedules also have to be disclosed. A vague payment range is not allowed unless the agreement clearly explains what triggers a rate change, such as a change in the resident’s care needs. The agreement must contain a statement, initialed and dated by the resident, confirming whether the resident agrees to a shared bedroom.⁹

Keep an individual record for each resident on the premises, current and accessible. It includes the screening assessment, medical history, current prescribing practitioner orders, any nursing delegations, the current care plan, and copies of legal documents like guardianship papers, advance directives, or a POLST form. Medication administration records must be kept for at least six months from admission or the most recent six months, whichever is less. If you handle a resident’s money, keep detailed financial records and receipts for every purchase of $5 or more made on their behalf. Facility records generally must be kept for three years, and resident records for three years after the resident leaves. Falsifying any record, or telling someone else to, triggers a mandatory civil penalty.⁸

Resident Rights You Must Honor

Oregon’s administrative rules include a Bill of Rights for adult foster home residents, and you must inform every resident of those rights at admission. The core protections include:

Treatment as an adult, with encouragement to exercise constitutional rights including voting, and the ability to manage personal finances unless a court has imposed a legal restriction.
The right to be informed of medical conditions and to consent to or refuse treatment.
Complete privacy during personal care, private communication with anyone the resident chooses, unopened personal mail, and confidential medical information.
Freedom from chemical and physical restraints except when ordered by a physician, consented to by the resident or guardian, and used only as a last resort. Restraints may never be used for discipline or convenience.
Protection from financial exploitation, including a prohibition on application fees, non-refundable deposits, or solicitation of money beyond what the residency agreement specifies.
30 days’ written notice and the opportunity for a hearing before any involuntary transfer, which is only allowed for medical reasons, the welfare of residents, or nonpayment.
The ability to make suggestions or complaints without fear of retaliation.

Oregon’s Long-Term Care Ombudsman, authorized under the federal Older Americans Act, provides free advocacy for residents of licensed care settings, investigates complaints, and can represent residents before government agencies.¹⁰

How to Apply and Get Licensed

Submit a completed application to your local licensing agency (either the APD office or the local AAA) with a non-refundable fee of $20 per resident bed.¹¹ A five-bed home costs $100. The application package includes a floor plan, emergency evacuation routes, a list of household members, proof of insurance, the health history statement, documentation of completed training, and evidence that background checks have been initiated for everyone who needs one.

Once the agency has a complete application, a licensor schedules an on-site inspection. The inspector verifies that the premises meet facility standards and the fire code, reviews training documentation, and confirms the home can deliver the level of care it intends to provide. Deficiencies are listed in a written report with a correction deadline. No license issues until every deficiency is resolved. When the home passes, the state issues a license specifying the maximum number of residents you may serve.

Renewal and Ongoing Inspection

Submit a complete renewal application and fee at least 120 days before the current license expires. A home that fails to renew on time is treated as unlicensed and can face civil penalties. The renewal package includes an updated physician’s statement if health information has changed, a tax compliance certification from the Oregon Department of Revenue for each owner holding 20 percent or more of the business, an updated floor plan reflecting any physical changes, and a self-inspection covering fire safety and federal home- and community-based services (HCBS) compliance.

The licensing agency runs an in-person inspection with every renewal. After it, you receive a written report listing any deficiencies with a correction deadline of no more than 30 days. The license will not be renewed until you fix the cited problems, and failing to do so can lead to denial of the renewal and additional administrative sanctions.

Penalties for Violations

Oregon imposes escalating civil penalties, and some carry mandatory fines that cannot be waived:

General rule violations: $100 to $250 per violation.
Falsifying records: mandatory penalty up to $500.
No qualified caregiver on duty 24 hours a day: mandatory $250.
Disabling or removing a smoke or carbon monoxide alarm: $100 to $250.
Admitting a resident whose needs exceed the home’s license classification: $250 to $500.
Retaliating against someone who reports abuse or mistreatment: mandatory $500.
Substantiated abuse: $100 to $1,000 per occurrence, with a minimum of $2,500 per violation if the abuse resulted in death, serious injury, rape, or sexual abuse.

Any penalty is due 10 days after the order is final. You have 20 days from the mailing date to request a hearing.¹²

Wage Rules When You Hire Caregivers

Under the Fair Labor Standards Act, domestic service workers are entitled to at least the federal minimum wage and overtime for hours over 40 in a week. Live-in workers employed directly by a household may be exempt from overtime, but a third-party employer like a home care agency cannot claim that exemption and must pay overtime. You and a live-in worker can agree in writing to exclude bona fide meal periods, sleep time, and off-duty time from compensable hours, as long as those periods are not interrupted by calls to duty. Even with such an agreement, track and record all hours actually worked.¹³

Oregon’s minimum wage is higher than the federal rate and varies by region. Through June 30, 2026, the Portland metro rate is $16.30 per hour, the standard rate covering most other counties is $15.05, and the non-urban rate for rural counties is $14.05.¹⁴

Tax Treatment of Care Income

Providers who live with the people they care for may qualify for a federal tax exclusion. Under IRS Notice 2014-7, payments received through a state Medicaid Home and Community-Based Services waiver program are treated as “difficulty of care payments” that can be excluded from gross income under Section 131 of the Internal Revenue Code. The exclusion applies whether or not the provider is related to the care recipient.¹⁵

The care recipient must live in the provider’s home under the recipient’s plan of care. “Home” means the place where the provider actually resides and carries out the routines of daily life, like sharing meals and holidays. The exclusion does not apply if the provider works in the care recipient’s home while living somewhere else, or if the provider performs respite care where the care recipient does not live. More than one provider living in the home may claim the exclusion. Payments received directly from a care recipient, rather than routed through the Medicaid program administrator, cannot be excluded.¹⁵

Zoning and Fair Housing

Neighbors or a homeowners’ association may push back on a proposed adult foster home. The Fair Housing Act prohibits local governments from using zoning or land use decisions to discriminate against people with disabilities. A municipality cannot deny a building or occupancy permit based solely on the disability of the people who will live in the home, and it cannot treat a household of people with disabilities less favorably than a household of unrelated people without disabilities.¹⁶

Local governments also have to make reasonable accommodations in zoning policies when necessary to give people with disabilities an equal opportunity to live in the housing of their choice. What counts as reasonable is decided case by case, and an accommodation is not required if it would impose an undue financial or administrative burden or fundamentally alter the local zoning scheme. The Fair Housing Act does not override local zoning across the board, but federal law controls whenever a local zoning decision conflicts with the Act.¹⁶

1
Oregon Department of Human Services. A Guide to Oregon Adult Foster Homes for Potential Residents
2
Oregon Public Law. ORS 443.705 – Definitions for ORS 443.705 to 443.825
3
Oregon Public Law. Oregon Administrative Rule 411-049-0150 – Limited Adult Foster Homes
4
Oregon Public Law. Oregon Administrative Rule 407-007-0210 – Definitions
5
Oregon Public Law. Oregon Administrative Rule 411-050-0715 – Facility Standards
6
ICC. Oregon Fire Code – Appendix R Adult Foster Homes
7
Oregon Public Law. ORS 443.725 – License Required; On-Site Provider
8
Oregon Department of Human Services. Oregon Administrative Rules Chapter 411 Division 50 – Adult Foster Homes – Standards of Operation
9
Legal Information Institute. Oregon Administrative Code 411-050-0705 – Residency Agreement
10
Administration for Community Living. Long-Term Care Ombudsman Program
11
Oregon Public Law. Oregon Administrative Rule 411-049-0135 – License Applications
12
Oregon Secretary of State. Oregon Administrative Rules – Department of Human Services
13
U.S. Department of Labor. Live-in Domestic Service Workers Under the Fair Labor Standards Act
14
Oregon Bureau of Labor and Industries. Oregon Minimum Wage
15
Internal Revenue Service. Certain Medicaid Waiver Payments May Be Excludable From Income
16
U.S. Department of Justice. Joint Statement of the Department of Justice and the Department of Housing and Urban Development: Group Homes, Local Land Use, and the Fair Housing Act