DIY and need some input – Home Insulation

Yes, this really belongs in DIY, but Houston is kinda special in that we live in a swamp, so there's water everywhere. The books don't really have a chapter on "houston insulation", just info on for like 75% of the country where it actually snows.

I have a 1970's era home with tar/mod bit paper and 3/4" plywood exterior, then insulation board and vinyl. We're taking out the old drywall to rewire and insulate (denim for interior walls, R13 for exterior walls). Anything wrong with using faced insulation with the paper on the inside, or should I just use unfaced insulation?