Connecticut raised the crumbling-foundation condo cap to $82,000 — and the loan bridging the gap collapsed
Connecticut raised the crumbling-foundation condo cap to $82,000 — and the loan bridging the gap collapsed
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.
The gap, and the loan that was meant to close it
This is the part that matters most to a Connecticut association and has been least reported.
An $82,000 per-unit cap against an average remediation cost of roughly $139,000 leaves a substantial shortfall. The Connecticut Housing Finance Authority operated a supplemental collapsing-foundation loan programme providing low-interest financing above the cap for exactly that purpose.
According to the programme's own March 2026 account, that loan programme ceased functioning in August 2025 when the last participating bank withdrew — and CFSIC learned of it only because homeowners were being turned away. Its staff were seeking replacement banks.2
For a condominium unit owner, whose cap is already a fraction of the stand-alone cap, the disappearance of the bridge financing is the difference between a remediation that proceeds and one that does not.
Why the per-unit cap is structurally awkward for associations
A crumbling foundation under a condominium is typically a single platform carrying several units. The programme caps total allowable concrete work by the number of eligible units resting on that platform, at $82,000 each.
Eligibility also has an exclusion that catches small buildings: a claim is ineligible where the unit in question is a single condominium unit on a single foundation platform, or where the majority of existing units on any single platform are so owned.5
A board approaching this should therefore establish, early, how many units sit on each platform and what severity class each platform carries — because those two facts determine both the money available and whether the September 2025 single-process rule applies.
Scale, funding and the deadline that governs everything
By late April 2026 the programme reported passing $200 million in remediation paid, 1,717 participation agreements issued, and 237 condominium families returned to safe homes, with roughly 60 further condominium units in progress.6
Funding through the programme's remaining life is committed rather than proposed: approximately $153 million, comprising $100 million from the Connecticut Bond Commission in four annual $25 million instalments beginning after July 1, 2026, plus roughly $10.6 million a year from the Healthy Homes surcharge.
The date every Connecticut association in the affected area should have in its minutes: applications close June 30, 2030 at 5:00 p.m. The programme expects to operate in run-off for roughly two years after that.
One further eligibility rule catches purchasers: a buyer who acquired on or after February 1, 2019 must have held a core specimen analysis or visual inspection report before buying.7
What is moving in Washington
A bipartisan federal bill sponsored by Representatives Joe Courtney and John Larson would let affected homeowners deduct foundation repair costs and the collateral damage the programme does not cover — driveways, basements, porches, garages, landscaping — retroactive to 2021. It has been approved by the House Ways and Means Committee and awaits floor consideration.8
Representative Courtney's framing of the gap: “It's a major construction site when this happens, and sort of putting all those other pieces back together, which CFSIC does not cover, basically has left people pretty much on their own.”8
What the legislature did not do
Two crumbling-foundation bills were introduced in the 2025 session and both died in the Insurance and Real Estate Committee without a hearing: House Bill 5087, which would have added pyrite to the remediation scheme and required a disclosure warning buyers that waiving a home inspection forfeits programme assistance, and House Bill 5088, which would have required homeowners policies to cover the peril of collapse for affected buildings.9
No crumbling-foundation bill of any kind was introduced in the 2026 session.
What to watch next
The first is whether a replacement bank is found for the CHFA supplemental loan programme. Without one, the $82,000 cap is the whole of what a Connecticut condominium owner can access.
The second is the 2030 sunset against the pace of condominium work. Association remediations are slower and more complex than single-family ones, and the programme has only recently begun its largest push into them.
Related Connecticut HOA Topics
- Cap increase effective January 20, 2026 — Connecticut Foundation Solutions Indemnity Company ↩
- CFSIC on the CHFA supplemental loan programme ceasing to function (March 2, 2026) ↩
- 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 ↩
- CFSIC Sixth Annual Report, Superintendent's Memorandum (October 31, 2025) — the September 23, 2025 condominium determination ↩
- Underwriting and Claims Management Program and Guidelines, CFSIC — modified with effect from January 20, 2026 ↩
- CFSIC operational milestones (April 27, 2026) — $200 million paid, 237 condominium families assisted ↩
- CFSIC on average remediation cost and the February 1, 2019 purchaser rule (June 29, 2026) ↩
- CT homeowners facing crumbling foundations could get relief with federal bill, Connecticut Public (July 8, 2026) ↩
- HB 5087 (2025), pyrite and buyer disclosure — died in committee ↩
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