Grace Lodge was set up by Singapore Buddhist Welfare Services (SBWS) in 1985, at 105 Punggol Road, to provide shelter and care for destitute, elderly females. In 1988, when Grace Lodge registered with the Registry of Societies (ROS) as a charity, it became an affiliate of SBWS, for providing residential care to needy, elderly females.

Grace Lodge was officially opened on 16 March 1986, by the late Mr Ong Teng Cheong, who was the Second Deputy Prime Minister then.

In 2014, Grace Lodge moved into Fu Hui Link, where its bed capacity was expanded to 300, for both female and male residents. Fu Hui Link, the brainchild of Venerable Kuan Yan (President of SBWS), is an Integrated community hub, which also houses facilities for infant care, childcare, student care and day care for the elderly.