2026-09-09 · Connecticut · Regulation

Connecticut's crumbling-foundation programme raised its per-unit condominium cap from $76,000 to $82,000 with effect from January 20, 2026. The programme's own reported average remediation cost is about $139,000.¹

The state loan programme that was supposed to bridge that gap stopped working in August 2025, and the captive insurer found out because homeowners were being turned away at the bank.²

The programme, briefly

The Connecticut Foundation Solutions Indemnity Company is a state-created captive insurer — Connecticut captive licence number 29 — regulated by the Connecticut Insurance Department. It pays to remediate residential foundations deteriorating because of pyrrhotite in the concrete, a problem concentrated in the state's north-east.

It is funded in part by a $12 surcharge that every Connecticut homeowners and renters policy carries under § 38a-331 — and the Insurance Department's own remittance notice lists the covered policies as expressly including “[c]overage for an individual residential unit that is part of a condominium (commonly written on an HO-6 form)” and the equivalent for a common interest community unit.³

So every Connecticut condominium unit owner with an HO-6 policy is paying into this programme, whether or not their building is anywhere near the affected area.

The caps, and the trap inside them

From January 20, 2026 the caps are $205,000 for a stand-alone residential building and $82,000 per eligible condominium unit, up from $190,000 and $76,000.¹

There is a timing condition that has cost claimants money. To get the new cap, both the date and the submission of contractor proposals must fall on or after January 20, 2026. A single earlier proposal pins the whole project to the old caps.¹

The condominium rule that unlocked the current wave

On September 23, 2025 the programme's Superintendent made a determination specific to associations:

“the Superintendent determined that he would permit condominium associations with a mix of Severity Class coded 3 and 2 foundations platforms, to the extent the association wishes to, to engage with a contractor to remediate all such valid crumbling foundations, regardless of severity class code, during one remediation process.”⁴

The programme describes this as the first time a Class 2 foundation has been permitted to supersede a Class 3 elsewhere in the system, reasoning that economies of scale would produce faster remediation.

1. Cap increase effective January 20, 2026 — Connecticut Foundation Solutions Indemnity Company ↩
2. CFSIC on the CHFA supplemental loan programme ceasing to function (March 2, 2026) ↩
3. Healthy Homes Fund $12 surcharge annual report and remittance notice, Connecticut Insurance Department (April 21, 2026) — covered policies include condominium and common interest community HO-6 ↩
4. CFSIC Sixth Annual Report, Superintendent's Memorandum (October 31, 2025) — the September 23, 2025 condominium determination ↩
5. Underwriting and Claims Management Program and Guidelines, CFSIC — modified with effect from January 20, 2026 ↩
6. CFSIC operational milestones (April 27, 2026) — $200 million paid, 237 condominium families assisted ↩
7. CFSIC on average remediation cost and the February 1, 2019 purchaser rule (June 29, 2026) ↩
8. CT homeowners facing crumbling foundations could get relief with federal bill, Connecticut Public (July 8, 2026) ↩
9. HB 5087 (2025), pyrite and buyer disclosure — died in committee ↩