Remove about 6 inches of soil from the edge of the foundation to allow access for applying the Styrofoam and stucco. Spray the walls with a pressure washer to remove dirt and grime, which prevents adhesion of the Styrofoam. Wait for the walls to dry completely before proceeding.
Cut the thin Styrofoam panels to the size of the area. Apply construction adhesive to the backside of each panel in lines about 1 inch apart using a caulking gun. Press the thin Styrofoam against the wall in the desired location to secure it in place.
Attach button shank to masonry nails to prevent the head from embedding into the Styrofoam and pound the nails through the Styrofoam with a hammer at a distance of about 12 inches apart.
Cut 1/4- to 1/2-inch wire mesh with a wire cutter to the size of the area and staple it in place to support the stucco covering.
Combine the stucco mixture with water in a large bucket following the package instructions. Apply the first layer of stucco by inserting the hose of the application sprayer into the stucco mixture and spraying an even layer over the Styrofoam and wire mesh.
Apply a second coat of stucco once the first thin layer dries using the same spraying method. Dab the surface about 15 minutes after the second stucco application with a damp sponge. Let the stucco dry for 24 hours and apply a third coat of stucco if desired.
Dry the stucco for at least 48 hours before exposing the wall to water.