Was wondering what the negative affects of installing two inch foam on the interior walls of the house vs exterior. The house is a old farm house 2 x 4 balloon framed construction, plan on dense packing the walls and do not really want to strip the aluminum siding to apply 2" foam. The interior walls are plaster and I am worried about possible condensation in the wall. Any thoughts would be appreciated

Where are you?
Unless there is a reason in your specific climate, you are usually far safer with the foam than without. Those 2" will warm the sheathing and keep any moisture in the wall cavity from condensing. Without the foam, the sheathing will be very cold and condensation is a possibility. the only negative is the time it will take to apply, but it's a net plus otherwise.

Also, what do you have between the dense pack and the exterior? Two types of moisture susceptible walls/ceilings work best: a) permeable to both sides and more so to the cold side and b) so much foam on the cold side that condensing temperatures to the warm side of the foam are rare (but typically not completely eliminated). This design must be permeable to the warm side (so that there is some drying path). Air sealing is important with any stack.

You are probably considering type a).

I am in climate zone 5a in upstate NY The wall stacks up like this From the interior of the walls out 1/2" drywall, 1x3 nailer for drywall, 2"eps foam, plaster and lath, 2x4 stud bay with dense packed cellulose , clad board siding, 1/2" osb, aluminum siding. Does anyone think with the foam on the warm side of the wall during the winter months that it will cause a moisture problem inside the wall cavity.

That plus Siga Wigluv will work - use google with "walls-interior-rigid-foam" for Martin Holladay's discussion. With EPS, I would (for low cost additional resiliency) paint the interior of the drywall with a moisture barrier paint. This will improve the inside to outside perm ratio while still allowing some drying to the interior.

Posted By JJSRenovations on 13 Apr 2016 09:08 PM
I am in climate zone 5a in upstate NY The wall stacks up like this From the interior of the walls out 1/2" drywall, 1x3 nailer for drywall, 2"eps foam, plaster and lath, 2x4 stud bay with dense packed cellulose , clad board siding, 1/2" osb, aluminum siding. Does anyone think with the foam on the warm side of the wall during the winter months that it will cause a moisture problem inside the wall cavity.

Is there is no sheathing, with the clapboards nailed directly to the studs it's VERY important that the exterior siding (in your case, aluminum) be inherently back ventilated. With aluminum (or vinyl) you'll be fine, but if you ever strip the siding and replace it with something else, there must be a vented air space between the siding and the next layer.

In zone 5A you don't absolutely need an interior side vapor retarder with ventilated siding such as aluminum, but any wall needs to be air-tight. At 2" unfaced EPS is already approaching Class-II vapor retardency at between 1-1.5 perms, which is more than sufficient, if air tight.

You'll get more bang/buck out of the 2" if you used foil faced polyiso, which would more than double the performance of a 2x4 balloon framed cellulose insulated wall. It would be the performance equivalent of 3" of EPS. Even 1.5" of foil faced polyiso would beat edge out the performance of 2" EPS.

Foil faced foam is easier to air seal the seams than unfaced foam, using decent quality foil tapes (such as Nashua 324a.)

A foil facer is a true vapor retarder at <<0.1 perms, which is fine in your stackup, since you have back vented siding providing a capillary break and a drying path to the exterior. With 2" of EPS you wouldn't have a really great drying path toward the interior anyway, and swapping it out with foil faced iso barely moves the needle on the moisture reslience of the the stackup.

Thanks for replying i have been looking on line and found factory seconds of 1.5" foil face has anyone used them before.