NOTICE: In accordance with Governor Lamont's emergency declaration, employees and the public are asked to observe social distancing measures to ensure communal safety and to slow the spread of the novel coronavirus (COVID-19). People are asked to work from home and telecommute wherever possible. Adhering to these instructions, the Department of Banking has closed its offices to the public. However, agency staff will continue to provide services to consumers and industry through telework. When contacting the Department, please use electronic communication whenever possible. Agency staff will continue to check voicemails during this time. Consumers are encouraged to use our online form for complaints. If you are unsure where to send an inquiry, you may send it to Department.Banking@ct.gov and it will be routed appropriately. Thank you for your patience during this time.

Supplemental Collapsing Foundation Loan Program

In response to the Crumbling Foundation Crisis, largely centered in eastern Connecticut, the General Assembly passed, and Governor Lamont signed, the Supplemental Collapsing Foundation Loan Program during the 2019 legislative session. Homeowners approved for financial assistance by the Connecticut Foundation Solutions Indemnity Company, Inc. (CFSIC) are eligible to apply.  The program aims to help these homeowners with repairs that may be outside the costs covered by CFSIC.  Homeowners can apply to borrow up to $75,000 for a term up to 20 years to assist in those repairs. The Connecticut Housing Finance Authority administers the program and maintains a list of Connecticut based banks and credit unions approved for the program, which is posted below. The Legislature established a $2 million guarantee fund to help facilitate these low interest loans. Below you will find additional details about the program. You can also visit the CHFA website.

 
The Supplemental Collapsing Foundation Loan Program is for owners of residential buildings who have already been approved for financial assistance by the Connecticut Foundation Solutions Indemnity Company Inc. (“CFSIC”) to help repair or replace a faulty concrete foundation[1].  The loan program is intended as a supplement to the financial assistance provided by CFSIC and loan proceeds can be used to finance repairs that might not otherwise be funded in whole or in part by CFSIC.  In this regard, borrowers may only use the loan proceeds to pay for certain “eligible repair expenses”.  Those expenses are limited to repairs that are necessary to (i) complete the repair or replacement of the foundation, or (ii) restore the functionality and appearance of the property to the extent that the functionality and appearance were compromised by the deterioration of the foundation or the demolition or construction process.  As long as the repair expense qualifies under this definition, a homeowner may, for example, use loan proceeds to pay for the repair or replacement of wall framing, drywall, paint and other wall finishes, porches or decks, gutters, landscaping, outbuildings or sheds and swimming pools.  Homeowners may not use loan proceeds to pay for any costs associated with significant upgrades to the property that do not otherwise constitute “eligible repair expenses.”

If approved, a homeowner can borrow up to $75,000 for a term not to exceed 20 years, as determined by the participating lender.  The loans will bear a fixed rate of interest that is determined on the basis of an external index published by the Federal Home Loan Bank of Boston.  The total amount of loans available under the Supplemental Program is capped at $20 million.  Participation by lenders is voluntary and lenders may limit loan approvals based on program availability and other factors.

To be eligible, a homeowner must have received a “participation agreement” from CFSIC and must provide the participating lender with a borrower certification regarding the eligible repair expenses proposed to be incurred at their property pursuant to a construction contract.  For more information, please review the material on the Connecticut Housing Finance Authority’s website.

[1] Please contact CFSIC at https://crumblingfoundations.org if you believe your home’s concrete foundations have been deteriorated due to the presence of pyrrhotite.

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Participating Financial Institutions, as of 11/4/2019:

Liberty Bank
Inside Sales, Middletown, CT:  (800) 433-3656

People's United Bank
850 Main Street, Bridgeport, CT  (800) 772-1090

Webster Bank, N.A.
CT Crumbling Foundations Support Line:  (877) 235-5897