This article reports on an exploratory study into the effectivity and value of admittance of elderly people with a psychiatric background to a residential home. The study was conducted in six homes, including 136 residents with a psychiatric background. Effectivity was measured by looking at changes in behavioral problems and changes in the ability to manage by oneself over twelve months at the beginning of the residency. On average, in both outcome measures the residents deteriorated a little. The value of residential admittance reflected three dimensions: the possibility to live a personal life, a group life, and a life as ordinary as possible. According to both the nursing staff and the medical staff these three dimensions represented for approximately 50% of the residents an important value. Multivariate regression analyses showed that admittance of psychiatric patients to residential homes may not be beneficial to all groups of elderly psychiatric patients (residents with dementia, other brain disorders with an organic component and schizofrenia showed unfavourable outcomes) and that residential projects directed by mental health care institutions performed better than those directed by the residential homes. Further research is needed to determine the optimal combination of patient groups and residential conditions.