Foundation walls are designed to bear lateral and vertical loads. Lateral loads are exerted from the pressure of the backfill on the outside of the wall, and surcharge -- loads in addition to the backfill, such as adjacent traffic. Hydrostatic pressure from the buildup of water against the walls also adds lateral pressure. Vertical loads consist of the live and dead loads of the structure, including the wall itself. The footing foundation wall structure is below grade, leaving room for a basement.
Concrete foundation walls are often designed as a T-shaped cantilever retaining wall. The wall rests on a footing base, a concrete pad wider than the wall. The footing provides resistance to overturning and sliding from the lateral pressure. The weight of the house is distributed to the footings and transferred to the soil, which ultimately bears the weight. Walls are placed on the footings, and a concrete slab is poured in between the walls.
Cracks in the foundation wall are entry points for water into the basement and eventually they can lead to structural deterioration. Concrete cracks occur for a variety of reasons; they can't be eliminated but they can be managed. Foundation design includes measures to keep cracking within bounds before it causes structural damage. Steel reinforcement keeps cracks from widening and vertical control joints placed at regular intervals also help contain them as the crack will stop at the joint.
Dealing with moisture is a significant concern with foundation walls. Concrete is porous; liquid and vapor moisture can migrate through the walls. Granular material is specified for backfill to allow water to drain to drainage tile, or pipe, installed at the base of the footings to convey water away from the structure. The walls are sealed against moisture with waterproofing compounds or membranes. Insulation below grade is usually rigid extruded polystyrene board, which is moisture-resistant.