In modern construction, you’ll always see a space from grade level to framing. This space varies, but it will minimally be about 8″ at the low point. This space helps to address two problems: pests such as termites, and ground water; both of which are trying to enter your home. In older construction, it is common to find the mud-sill at the same (or sometimes even lower) elevation as grade. This is a potentially serious problem, as both termites and water have direct contact with the framing.
When I first looked at the exterior wall depicted in the above photo, I thought it looked pretty sound. The stucco ended at a weep screed, and there was about 8″ spacing between the weep screed (which represent the bottom of the framing / sheathing) and grade. But then I realized that the foundation vents were within the foundation wall, which is unusual. Foundation vents are normally placed atop the mudsill (or higher), but they are almost always placed in the framed portion of the flooring or cripple wall above the foundation.
As I looked more closely, I saw that what I thought was the concrete foundation was actually several long pieces of galvanized sheet metal. So the builder who had performed the last remodel of this home had stripped the old stucco off, sheathed the framing with 1/2″ CDX plywood, and ran the plywood down to the original mudsill, which was at grade.
This resulted in plywood (and the floor framing behind the plywood) extending to grade. So the builder decided to cover the lowest section of the framing with sheet metal, hoping this would provide a “break” between grade level and the stucco and weep screed. Only time will tell if this decision will accomplish what it’s intended to accomplish. In any case, it’s probably preferable what existed previously, which was likely direct contact between the framing and the adjacent soil.