Moving is plenty stressful.

And it just got a lot worse for families when they realized they were breathing in formaldehyde inside their new homes. It's less serious for others - but their move-ins are being delayed.

For Alyse Smith it starts immediately.

“It’s stinging it’s stinging really bad,” she said.

In her unfinished basement - where her kids have been playing for almost two months - Smith found out a week ago, all the I-joists painted green in the ceiling were coating with a Flak Jacket coating with formaldehyde-based resin, meant for fire protection.

But after the formula changed, the formaldehyde wasn’t bound well enough and people started complaining about a smell.

“Awful. It’s a nightmare for a new homeowner. It's just something we didn’t plan on,” Smith said.

Seattle-based company Weyerhaeuser makes building materials and said 2,200 basements have this problem-coating. It was manufactured after December 1 of last year but the company wouldn’t say how many in Colorado

While Smith was told to only go in her basement five minutes at a time and keep it locked up.

Another family chose to move out and another home has a sign saying 'stay out.'

"Formaldehyde is a volatile organic compound," said Dr. Aaron Wolfe with Presbyterian/St. Luke's Medical Center.

Short term, he said breathing in formaldehyde can trigger coughs and watery eyes, but long term can lead to chronic problems including cancer.

Weyerhaeuser said most homes affected are still being built and promises to cover the costs to fix it.

The company provided this statement from a spokesman:

“Our top priority is to do the right thing by taking care of every homeowner affected by this situation. We are working to resolve the issue as quickly as possible, and remediation has already been completed in several homes. Most affected homes are not yet occupied. In the limited number of homes that are occupied, we have advised homeowners to refrain from using their basements until the remediation is complete. For those who choose to stay in temporary housing until the issue is resolved, we are of course making arrangements for them and fully covering the cost. We have been working directly with homeowners and builders to understand each unique situation, and we are absolutely committed to making this right for everyone who is affected.”

It’s really common to find formaldehyde in building materials because it can act as an adhesive and preservative.

Weyerhaeuser said they will be either fixing the I-joists or replacing the and stopped producing the Flak Jacket coating.

Some families found out about the problem from their builders and Weyerhaeuser said they are working with families as well.

The company is anticipated spending $50 to 60 million fixing the problem.

9NEWS has not received statement from the construction companies building these homes.