NAICS 623210 Quarterly Industry Report
Residential Mental Retardation Facilities
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 623210Sector: Health Care and Social Assistance (62)Updated: Q1 2026
About This Report
This industry profile for Residential Intellectual and Developmental Disability Facilities (NAICS 623210) draws on data from the U.S. Census Bureau[8], Centers for Medicare and Medicaid Services[6], Bureau of Labor Statistics[9], and SBA size standards database[7]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, disability services analysts, and residential care investors with current market data. All quantitative claims are sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the residential mental retardation facilities industry.
NAICS Sector
62
Health Care and Social Assistance
Industry Definition & Overview
Residential Intellectual and Developmental Disability Facilities (NAICS 623210) encompasses establishments primarily engaged in providing residential care services for persons diagnosed with intellectual disabilities, developmental disabilities, or both per the U.S. Census Bureau[5]. These facilities - including group homes, intermediate care facilities for individuals with intellectual disabilities (ICF/IID), and community-based residential programs - provide room, board, protective supervision, and counseling services. Medical care may be available on site, though the primary mission centers on habilitation, daily living skills training, and community integration.
The sector has shifted over several decades from large institutional settings toward small community-based group homes serving 4 to 8 residents each, driven by the 1999 Supreme Court Olmstead decision requiring states to serve individuals in the most integrated setting appropriate. Medicaid Home and Community-Based Services (HCBS) waivers fund the majority of community residential placements, with states drawing on federal matching funds per CMS[6] waiver program guidelines. National spending on HCBS for intellectual and developmental disabilities exceeds $100 billion annually across all waiver categories.
Per the SBA Table of Size Standards[7], the size standard is $19 million in average annual receipts. ICF/IID facilities must meet Conditions of Participation under 42 CFR Part 483 Subpart I, including active treatment requirements mandating individualized programs designed to help residents acquire skills to function at their highest capacity. State developmental disability agencies license and certify residential providers, with direct support professional (DSP) staffing shortages representing the industry's most pressing operational challenge. DSP turnover exceeds 45 percent annually per workforce surveys, driven by wages that often compete with retail and fast-food positions.
What's Included in This Industry
- Community-based group home residential services
- Intermediate care facilities for individuals with intellectual disabilities
- Daily living skills training and habilitation programs
- Protective supervision and behavioral support services
- Personal care assistance with hygiene, meals, and mobility
- Community integration and vocational readiness programming
- Individualized service plan development and coordination
- Medication administration and health monitoring
- Family support and respite care coordination
- Direct support professional staffing and training
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Health Care and Social Assistance | 62 |
| Subsector | Nursing and Residential Care Facilities | 623 |
| Industry Group | Residential Intellectual and Developmental Disability, Mental Health, and Substance Abuse Facilities | 6232 |
| NAICS Industry | Residential Intellectual and Developmental Disability Facilities | 62321 |
| National Industry | Residential Intellectual and Developmental Disability Facilities | 623210 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 623220 | Residential Mental Health and Substance Abuse Facilities | Residential Mental Health and Substance Abuse Facilities serve populations with behavioral health conditions that frequently co-occur with intellectual disabilities, with dual-diagnosis residential programs bridging both classifications when residents present combined mental health and developmental needs |
| 623110 | Nursing Care Facilities (Skilled Nursing Facilities) | Nursing Care Facilities provide skilled medical care for individuals with intellectual disabilities whose physical health needs exceed group home capabilities, with medically complex residents sometimes requiring skilled nursing placement when residential I/DD facilities cannot meet their care requirements |
| 623990 | Other Residential Care Facilities | Other Residential Care Facilities serve diverse populations needing supervised living arrangements that overlap with developmental disability services, with some facilities supporting individuals who do not meet diagnostic criteria for I/DD classification but still require structured residential support |
| 624120 | Services for the Elderly and Persons with Disabilities | Services for the Elderly and Persons with Disabilities provide community-based day programming, supported employment, and personal care that complement residential services for individuals with intellectual disabilities living in group home settings |
| 624310 | Vocational Rehabilitation Services | Vocational Rehabilitation Services deliver job training and supported employment programs that serve residential I/DD facility residents preparing for community employment, with day programming and work readiness training coordinated between residential and vocational providers |
| 621420 | Outpatient Mental Health and Substance Abuse Centers | Outpatient Mental Health and Substance Abuse Centers treat behavioral health conditions in individuals with co-occurring intellectual disabilities, with community-based mental health clinicians providing therapy and psychiatric medication management to group home residents |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | New York | 10.3% | 3,674 |
| 2 | Minnesota | 7.7% | 2,747 |
| 3 | California | 7.3% | 2,628 |
| 4 | Pennsylvania | 5.9% | 2,124 |
| 5 | Massachusetts | 4.7% | 1,672 |
| 6 | Ohio | 4.5% | 1,606 |
| 7 | Michigan | 4.3% | 1,540 |
| 8 | Texas | 4.1% | 1,477 |
| 9 | Illinois | 4.1% | 1,465 |
| 10 | Indiana | 3.5% | 1,249 |
% Of Establishments
0%
10%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
304
Total SBA Loans
$272.6M
Total Loan Volume
$897K
Average Loan Size
15 yrs
Average Loan Term
9.88%
Average Interest Rate
7,464
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[7], Residential Intellectual and Developmental Disability Facilities (NAICS 623210) has a size standard of $19 million in average annual receipts for federal contracting purposes. SBA lending programs[10] support facility acquisition, residential property adaptation, and program expansion for qualifying residential care providers. Eligible businesses can access SBA 7(a) loans[11] for working capital, equipment, and acquisition financing, while 504 loans[12] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Live Oak Banking Company | 48 | $75.0M | $1.6M |
| 2 | Peoples National Bank National Association | 24 | $45.5M | $1.9M |
| 3 | Old National Bank | 8 | $30.5M | $3.8M |
| 4 | Evolve Bank and Trust | 8 | $21.6M | $2.7M |
| 5 | CalPrivate Bank | 8 | $13.6M | $1.7M |
Frequently Asked Questions
Common questions about this industry.
What is the NAICS code for group homes for individuals with disabilities?
NAICS 623210 covers residential intellectual and developmental disability facilities including group homes, ICF/IID programs, and community residential services per the U.S. Census Bureau[5].
What is the SBA size standard for residential I/DD facilities?
The SBA size standard[7] is $19 million in average annual receipts, determining eligibility for federal small business contracting programs and SBA lending products.
What is the Olmstead decision's impact on this industry?
The 1999 Supreme Court Olmstead decision requires states to provide services in the most integrated setting appropriate per HHS[13] civil rights guidance, driving the decades-long shift from large institutions to community-based group homes serving 4 to 8 residents each.
How are residential I/DD services funded?
Medicaid Home and Community-Based Services waivers fund the majority of community residential placements per CMS[6] waiver program data, with states drawing federal matching funds that collectively exceed $100 billion annually across all HCBS waiver categories for I/DD populations.
What are ICF/IID requirements?
Intermediate care facilities for individuals with intellectual disabilities must meet Conditions of Participation under 42 CFR Part 483 per CMS[6] certification standards, including active treatment requirements mandating individualized programs to help residents function at their highest capacity.
What staffing challenges affect this industry?
Direct support professional turnover exceeds 45 percent annually per industry workforce surveys, driven by wages that often compete with retail and fast-food positions per Bureau of Labor Statistics[9] wage data for residential care workers.
What licensing applies to group homes?
State developmental disability agencies license and certify residential providers with requirements varying by state, covering staff training, background checks, physical plant standards, and individualized service plan documentation for each resident.
How large are typical group home settings?
Community-based group homes typically serve 4 to 8 residents each per state licensing guidelines, with smaller settings promoting person-centered care and community integration compared to the large institutional models that previously housed hundreds of individuals.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]CMS cms.gov
- [7]SBA Table of Size Standards sba.gov
- [8]U.S. Census Bureau data.census.gov
- [9]Bureau of Labor Statistics bls.gov
- [10]SBA lending programs sba.gov
- [11]SBA 7(a) loans sba.gov
- [12]504 loans sba.gov
- [13]HHS hhs.gov
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