To keep bits of stucco from falling between the new siding and the old stucco, scrape away loose or crumbling debris from cracks in the stucco and roughly patch the cracks with mortar. It doesn’t have to look good because the siding will cover the patched spots.
Vinyl and other types of siding attach every 16 inches, so you’ll need vertical furring strips 16 inches apart. Use 2-by-4-inch strips made from treated wood because stucco, being a masonry product, can absorb moisture and transfer it to the furring strips. Pre-drill holes in the furring strips about 8 inches apart. While holding the strip in place on the stucco wall, insert concrete screws through the holes and into the stucco, using a hammer drill.
For a more energy-efficient home, this is the time to add a layer of insulation. Cut rigid foam insulation board to fit snugly between the furring strips and use the recommended adhesive to hold it against the stucco. The foam must be no thicker than the thickness of the furring strips. For example, if you install 2-by-4-inch furring strips, which are actually 1.5 inches thick when installed flat against the wall, install 1.5-inch thick rigid foam insulation between the strips.
Install the corner trim, window trim and door trim before hanging the siding strips. Most types of vinyl, fiber or cement-fiber siding install after the trim is in place. Siding installation starts at the bottom, flush with the bottom of the sill plate, and each successive siding strip installs above the previous one. Insert siding nails every 16 inches, into the furring strips, but do not insert nails between the strips. Check for level after installing each row of siding, to ensure a straight, professional look.