Something that is moldy has mold growing on it, like old bread or cheese.
Moldy things are usually seen as bad and not good to eat.
Examples:
The bread is moldy and I can't eat it.
I found some moldy cheese in the fridge.
The old books in the basement are all moldy.
I don't want to eat that moldy sandwich!
The forgotten fruit in the back of the fridge is now moldy.
The smell of the moldy bread made me feel sick.