I'm in the process of finishing my basement in northern Indiana, and I've encountered some potential issues to consider. I bought this house, and they had already started some work. Recently, we had a bit of water come through a small window, but that was fixed, and they installed a French drain in the well. They also put in 2x3 walls around the perimeter and cheap insulation (about R6) covered with plastic on the warm side. There's a perimeter drain channel around the foundation along with a sump pump, and the walls are set in about 2 inches from that drain channel. Now, I'm planning to replace some walls that got wet—about 10 feet worth. The insulation has been sagging and touching the concrete wall in a few areas. Recently, I pulled off the plastic and removed the unfaced insulation, putting up faced R13 insulation instead. My walls are around 12 inches above the grade, and I'm considering adding a vapor barrier. I saw that Indiana code might not require it, but I came across information online suggesting it's still a good idea. I have a few questions: 1. If I decide to put up a vapor barrier, do I need to extend it all the way up to the floor joists and tape it, or can I just go to the top of the wall and leave an air gap? 2. Would using green board Sheetrock on the basement walls instead of regular Sheetrock be beneficial? 3. Is a vapor barrier even necessary, considering my basement has been dry since the water issues were resolved?
2 Answers
About your second question, green board Sheetrock is definitely a good option for moisture-prone areas like basements! It's moisture-resistant and will hold up better than regular Sheetrock, especially in high-humidity areas like a bathroom or where condensation might occur. And regarding the vapor barrier—if your basement has been dry, you might be okay without it, but weigh the long-term benefits before deciding. It's usually better to err on the side of caution with moisture in basements.
You might want to reconsider your approach to vapor barriers, especially in zone 5 like Indiana. An interior vapor barrier can trap moisture from outside, leading to mold and rot over time. Ideally, you should have a vapor barrier installed between the wall structure and the foundation to prevent vapor from contacting the materials. Using foam board insulation (like XPS or closed cell spray foam) can be a better solution. It's also crucial to create a thermal break to manage air leakage. Without that, you're likely to see condensation issues as warm air meets the cold foundation, fostering mold growth. **Consider this if you're serious about finishing your basement!**
I've seen others use a dimpled membrane on the interior walls to help manage moisture and act as a vapor barrier. It works pretty well because it lets water flow down to the drain without taking up much space.

Will using foam directly on the cement wall mess with my channel drain system? I’m worried about water flow.