You wouldn't need to do this "home ownership program" to get around this regulation, though you might still deem it a good idea.

I agree with everything Jon said, plus Ali makes a great point about knowing your local regulations and knowing that it's a possibility that Airbnb's could be banned in the future in your area even if legal now.That being said, I love my three Airbnb's!

It sounds like you should contact the planning and zoning office of that city or county to see what the regulations are.

Here's that criteria:The Order does not prevent you from being evicted for(1) engaging in criminal activity while on the premises;(2) threatening the health or safety of other residents;(3) damaging or posing an immediate and significant risk of damage to property;(4) violating any applicable building code, health ordinance, or similar regulation relating tohealth and safety; or (5) violating any other contractual obligation of a tenant’s lease, other than the timely payment of rent Provide the CDC Declaration for her completion and signature; you can download it here:https://www.cdc.gov/coronaviru...Page 2, bullet 3, states the tenant is still liable for unpaid rent. 

@Frank Jennings this would be a tricky and potentially risky situation if it were in my market.Sometimes properties are grandfathered in due to newer zoning regulations and minimum lot requirements.

I have been following those regulations and do hope they change (though up to 10 people per house seems a bit much too).

Now, after all this, I wonder how to handle it properly with accordance of local State laws and regulations?

To start out with the "small landlord kit" has everything you need, from application to rules&regulations and lead paint disclosure - and it is very inexpensive. 

Yes, there are private lenders in the residential assisted living space.As you know, these facilities are regulated by each state. 

They are regulating real estate agents, that’s all.