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Hello audreys5boys. Welcome to the board.
We looked into this just a few months ago. Here's what we found out (I'm in Houston by the way).
With our agency, they do have "group" homes, but they don't usually start out that way. They start you out with 1 or 2 kids and build up over time. It is considered a "group" home, but not an institutional group home, which has a whole different set of rules. Yours would be a "family" group home.
You still have the basic rules for fostering ... 40 sq ft of space per child in the room, rooms have 4 walls and a door and there's a rule to how small a room can be if only 1 child is in it -- no closets, can't go through anothers bedroom to get to a bedroom -- and on and on.
So, based on what you've said, they'd probably let you foster 1 child and see how it goes. It also depends on the support you have from your agency (I would go with an agency over straight CPS in this situation). That's where you'll get the answers. They are the one's in charge of monitoring you and getting your stuff into the licensing board.
Just be prepared that foster children come with a whole set of behaviors that your children most likely won't have had. We fostered/adopted a sibling set of 3 and there were times when we had to split them into 2 cars to go somewhere (even to get home). They just would feed off the other's energy and tantrums were common. A tantruming 2 yr old is a lot different than when they are 8 or 11. We haven't had to do that in a while, but it wasn't something we had prepared ahead of time to do.
It's a tough road at times, I'm glad we did it, and like you, want to add to our family some more (we have 4 in the summers). However, that's not going to happen until we move into a larger home.
Good luck! Let us know how it goes.