Renting By the Room to Disabled Tenants for Above Market Rent?

[Jeff G.]

I keep hearing bits and pieces about a rental strategy that is best called "Renting to the Disabled by the Room for Above Market Rent" that goes something like this: 

(1) Buy a house with as many legal bedrooms as you can that still has a decent sized common area, (2) rent it out to the relatively high functioning disabled crowd, (3) via some [unnamed] Government program the State pays above market rents for each of the tenets. (4) Send a house keeper 1-2 times per week to ensure the place stays clean and otherwise make sure there are no issues.

The up side is: you get above market rent with a much higher than average tenant count. The opportunity cost issues are: having to pay all utilities plus a housekeeper along with some regulatory overhead from the State, along with some "gotchas" like not being able to put locks on bedroom doors or you're technically operating a boarding house which is a whole different can of worms. You're still just a property owner, not in the medical business. The state pays you, not the tenant.

Allegedly, the tenants do better because they're in a communal setting and the case workers love it too, because they don't have to travel to as many houses.

As there are broadly similar approaches to student housing, this isn't setting my BS alarm off; at least, not exactly. All of this seems reasonably plausible, which is why I'm bothering to ask about it. It just seems like there must be more to it or a lot more investors would be doing it.

I've tried to Google this, but without an exact program name I'm not getting very far. Is this really a thing? I'm just trying to wrap my brain around this strategy and assess its legitimacy. If legit, what program (or programs) is this kind of strategy taking advantage of? Are there any major pitfalls?