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I think a big part of your questions depends on your state. We had an elderly relative with us for a little while with kids here, she had her own room and needed a background check but otherwise it was no big deal (admittedly she was only in her 60's and a big help with the kids). Some states have regulations about bios and fosters sharing rooms some don't
I think they would do a background check on your grandfather but that wouldn't rule you out. Check with your state about the rooms. In NY, kids can share a room as long as they're the same sex but only up to 3.
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