Can you place wood based mulch next to foundation of a house?

Yes you can. Most commercially available wood mulch is treated against insect infestations which is the primary issue with placing wood mulch in flower beds next to your home. I made a mistake and purchased pine bark directly from a logging company not far from my home. They had a chipping operation and the pine back was a product of this chipping so after they removed the bark it was usually burned in an incinerator. I purchased several truckload of this pine bark from them. As my home was well treated for termites this was not the problem. My problem was roaches that love pine bark. Another problem was summer rain. When we got heavy summer rain, my pine bark tended to float off with the rainwater. I will never do this again and won't try to be so cheap. You get what you pay for so always buy the treated cypress mulch (my preference). I like the red color as well.