Guides · Minnesota
How to start a group home in Minnesota: the two licenses people confuse.
What a group home actually requires on paper, why the 245D moratorium changes the timeline, and what you can still do in 2026.
The two licenses people confuse
Most people who search “how to start a group home” are picturing one license that covers the whole operation: the house, the staff, the services. Minnesota does not work that way. There are two distinct tracks, and mixing them up is the single most common reason new operators stall.
The first track is the service license. For home and community-based services, that is 245D (Minn. Stat. ch. 245D). It licenses what you do for people: the supports, the supervision, the documentation. 245D comes in two levels, basic support services and intensive support services, and the level you need depends on the kind of support you intend to deliver. The service license attaches to your agency and its people, not to a building.
The second track is the setting. The physical home where people live has its own approval requirements on the facility side, separate from the service license. The details depend on the kind of setting and who lives there, so check the specifics with your licensor rather than assuming the service license covers it. The practical point is this: a 245D license without an approved setting serves nobody, and a well-prepared house without a service license is just a house. Budget time and money for both tracks from day one.
How the moratorium changes the picture
Here is the part most older guides will not tell you. Effective January 1, 2026, DHS stopped accepting new 245D license applications. The pause is expected to last about 24 months, through December 31, 2027. Applications that were pending when the moratorium took effect were cancelled, not queued. Existing licensees cannot add new service lines to their licenses during the pause either.
DHS cited a 283% surge in applicants and a review backlog as the cause. Whatever you think of the policy, the operational reality is that the front door is closed for new 245D applicants for now.
There is one exception mechanism, and it is narrow. A lead agency (a county or MCO) or a Tribal Nation can file through its designated moratorium liaison, naming a specific provider, for a person-specific or regional capacity need. Notice what that means in practice: you cannot file the exception yourself. A lead agency has to want you, by name, for a need it has documented. If you have a real relationship with a county that has people it cannot place, that is the conversation to have. If you do not, the exception path is not a plan, it is a hope.
What you can still do right now
The moratorium closes one door. It does not close the field. If your goal is to serve people in their homes and communities in Minnesota, these paths are open today:
- MDH comprehensive home care licensure. This is a different license, issued by the health department rather than DHS, covering home care services. If your service model fits home care, this route is accepting applicants.
- PCA/CFSS agency enrollment. Personal care assistance and its successor program CFSS have their own enrollment path, separate from 245D licensing. Note the transition deadlines: extended PCA cannot be received after September 30, 2026, and the overall PCA/CSG-to-CFSS transition deadline was extended in May 2026 to September 30, 2027.
- The lead-agency exception for 245D. Build relationships with county case management and MCOs now. If a documented person-specific or regional capacity need exists, a lead agency or Tribal Nation can file through its moratorium liaison and name you.
- Preparation. Policies, procedures, staffing plans, role qualifications, and documentation systems all take longer than people expect. Consultant policy packages commonly sell for $850 to $1,280 (STAR Services is one common source), which tells you the market rate for just the paper layer. Operators who use the pause to get ready will move faster when the door reopens.
One honest caution: do not sign a lease on a property expecting a 245D license that cannot currently be issued. Sequence your commitments behind the license path you can actually complete.
Operating realities once you are licensed
Getting licensed is the start, not the finish. A few realities worth pricing into your plan before you commit:
Staffing follows the people, not the building. Staffing expectations scale with each person’s assessed needs and support plan. That means your labor cost is driven by acuity and headcount together, not by the building. Two homes with the same square footage can have very different staffing obligations.
Two named roles with statutory qualifications. 245D requires a designated coordinator and a designated manager, each with a qualification ladder combining education and supervised experience. A degree shortens the required experience; no degree means more years of direct-care experience. Do not guess at the combinations; read the statute and verify your candidates against it before you hire.
Documentation is the job. Service delivery you cannot show on paper did not happen, as far as a licensor or auditor is concerned. Case notes, incident reports, consents, and staff records all have to exist, stay current, and survive review. Incident reporting in particular has timelines and follow-up expectations, and it is where informal operations get hurt first.
EVV is now a hard requirement for covered services. Minnesota requires 50% of billed visits to be electronically verified from January 1, 2026, rising to 80% from July 1, 2026, with DHS corrective-action notices to sub-80% providers beginning October 2026. All EVV-required providers must enroll with HHAeXchange, the state aggregator, and submit all visit data through it. If your service mix touches EVV, build the workflow in from the start rather than retrofitting it.
Common questions
Can I start a group home in Minnesota right now?
Not through a new 245D application. DHS stopped accepting new 245D license applications on January 1, 2026, and the pause is expected to run roughly 24 months, through December 31, 2027. Pending applications were cancelled. The exceptions run through a lead agency (county or MCO) or a Tribal Nation, which must file through its designated moratorium liaison and name a specific provider for a person-specific or regional capacity need.
Is a group home license the same as a 245D license?
No, and this is the most common confusion. 245D licenses the services delivered to people, at two levels: basic and intensive support services. The physical home where people live is a separate matter with its own setting-side requirements. You can hold a 245D license and still not have a place ready to serve people — and a suitable house by itself is not permission to serve anyone. Plan for both tracks from the start.
What can I do during the moratorium if I want to enter this field?
Three realistic paths: pursue MDH comprehensive home care licensure, which is a different license under the health department; enroll as a PCA or CFSS agency; or work the lead-agency exception path for 245D itself, which requires a county, MCO, or Tribal Nation to name you for a specific capacity need. You can also use the waiting period to build policies, staffing plans, and documentation systems.
What roles does 245D require me to fill before serving anyone?
245D requires a designated coordinator and a designated manager. Each role has a statutory qualification ladder combining education and supervised experience: a degree with fewer years of experience, or no degree with more years of direct-care experience. Read the statute for the exact combinations, because reviewers check these qualifications against personnel records. One person cannot paper over a gap here; the roles carry real oversight duties.
Where ClientCentric fits, plainly
ClientCentric is operations software for 245D and HCBS agencies: client records, staff assignments, scheduling, visit documentation with EVV workflows through HHAeXchange, case notes with a locked lifecycle, incident tracking, consents with expiry, and an append-only audit history. It will not get you a license and it does not submit claims (billing to MN-ITS or MCOs stays in your billing workflow), but if you are using the moratorium period to build an agency that can pass review from day one, it is the documentation and operations layer, with migration included in onboarding.
Keep reading
- The 245D license moratorium, explainedWhat DHS paused, for how long, and how the lead-agency exception actually works.
- 245D policies and proceduresWhat the policy layer has to cover and how to build it during the waiting period.
- Minnesota EVV requirementsThe 2026 thresholds, HHAeXchange enrollment, and the six required visit elements.
Written and maintained by the ClientCentric team from the working product. Last reviewed . Sources: Minn. Stat. ch. 245D and DHS moratorium and EVV guidance. Licensing details change; verify against current statute and your licensor. This is operational guidance, not legal advice.