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Yes, it is common for mold to grow on the underside of the siding due to the moist atmosphere. When there is an abundance of moisture, mold has the ideal environment to spread and thrive. This fungus can be found on virtually any surface, both indoors and outdoors. Generally, it is most active when the environment is warm, damp, and humid.

Oil-based stains are preferred over latex or water-based varieties because your home's cedar siding must constantly withstand the weather conditions in your location. These stains provide better penetration into the wood to more effectively protect it from UV rays and water infiltration. Oil-based stains are available in transparent, semi-transparent, opaque, or solid-color selections to achieve the look you desire.

Wood siding requires an air gap behind it to allow water to drain out, and for air circulation and venting to allow humid air to escape and keep the material from rotting due to moisture. 

You should plan to stain or refinish your home's cedar siding every three to seven years to maintain its appearance and provide maximum protection, though some estimates suggest a range of four to six years. The exact frequency depends on several factors, including your local climate, exposure to severe weather like direct sunlight, rain, and wind, the quality of the initial stain application, the type of stain used, and the overall condition and quality of the wood.

For homes in harsh climates with high humidity and significant sun exposure, you should plan on staining as often as every three years, while those in milder locations may only need to do so every seven years. For the longest-lasting protection in particularly harsh climates, consider using an opaque stain.

If you are looking for a lower-maintenance alternative, you might consider vinyl or aluminum siding. While the initial installation cost can be higher, they do not require as much upkeep and can offer more value over time, especially in areas with excessive rainfall or high humidity.