Exterior Insulated Foam Siding: The facts about EIFS

A friend is trying to interest my husband in a new process of building homes out of foam boards coated with thin layers of concrete called EIFS.  Do you have any information and comments on this type of construction?

The Money Pit Answer

It sounds like you are talking about Exterior Insulated Foam Siding (EIFS). This type of foam siding system became popular in the 1980's when high energy prices made insulated siding a wise choice. When done well, EIFS is beautiful, like real masonry stucco. However, the system has been plagued in the residential market by reports of leakage and the resulting lawsuits, including the potential of mold damage forming under the siding.
While manufacturers have been working diligently to resolve the problems and the EIFS systems have changed over the years to include ways for it to drain moisture that gets past the surface, we are still very reluctant to recommend it.