The most vulnerable residential settings during the COVID-19 pandemic were older adult’s nursing homes, which experienced high rates of incidence and death from this cause. This paper aims to ascertain how institutionalized older people assessed their residential environment during the pandemic and to examine the differences according to personal and contextual characteristics. The COVID-19 Nursing Homes Survey (Madrid region, Spain) was used. The residential environment assessment scale (EVAER) and personal and contextual characteristics were selected. Descriptive and multivariate statistical analysis were applied. The sample consisted of 447 people (mean age = 83.8, 63.1% = women, 50.8% = widowed, 40% = less than primary studies). Four residential assessment subscales (relationships, mobility, residential aspects, privacy space) and three clusters according to residential rating (medium-high with everything = 71.5% of cases, low with mobility = 15.4%, low with everything = 13.1%) were obtained. The logistic regression models for each cluster category showed to be statistically significant. Showing a positive affect (OR = 1.08), fear of COVID-19 (OR = 1.06), high quality of life (OR = 1.05), not having suspicion of depression (OR = 0.75) and performing volunteer activities (OR = 3.67) were associated with the largest cluster. It is concluded that a better residential evaluation was related to more favourable personal and contextual conditions. These results can help in the design of nursing homes for older adults in need of accommodation and care to facilitate an age-friendly environment.