I'm not sure really, there isn't any indication of why she was in a group home. I just think it is going to be difficult due to the passage of time to find out what happened re. her demise, due to lack of DNA available to LE on part of whoever murdered her. Sometimes it isn't an issue, but being only a partial skull was found...
From what I've read, her sisters were raised in different home or time frame than Wanda, and that LE was able to get DNA from them for testing or at least got information of some kind from them. I got the impression that she somehow got lost in the foster/group home system and of course so much time has passed, that it will take a bit of investigation to try and find records, etc.
A group home could've been a non-foster situation. No, it isn't completely clear if she was in one, just going by what the Charley Project webpage and LE have thought was the case: "Herr disappeared sometime in June 1976; she was living in a group home in Gresham, Oregon at the time."