Faracy was born in Brooklyn, New York, and grew up in Elk Grove Village, Illinois. She studied acting at Illinois Wesleyan University and Yale School of Drama. She began her acting career in New York stage, and in 1976 has made her television debut in an episode of ABC sitcom Laverne & Shirley. She went to star in two unsold sitcom pilots, before playing Corinne in the 1978 comedy film Heaven Can Wait. The following year, Faracy played the female leading role of overweight waitress Angel Childress in Columbia Pictures drama film When You Comin' Back, Red Ryder?, and svelte Fifi the French Maid named Babbette in the 20th Century Fox' ensemble comedy Scavenger Hunt.
Faracy has long-running career on television. From 1979 to 1980, she starred in the short-lived CBS sitcom The Last Resort. From 1983 to 1984, she co-starred alongside Bill Bixby and Mariette Hartley in the another CBS sitcom, Goodnight, Beantown. Also during 1980s, Faracy had roles on the number of miniseries, include The Thorn Birds (1983) as Mary Carson's servant, Judy, Space (1985), and Windmills of the Gods (1988). In film, she co-starred alongside Bruce Willis and Kim Basinger in 1987 romantic comedy film Blind Date, and the following year played John Candy's wife in comedy film The Great Outdoors.
In 1990, Faracy starred alongside Martin Mull in the short-lived NBC sitcom His & Hers. Later that year, she began starring in the Fox sitcom True Colors about an interracial marriage, alongside Frankie Faison (season one), Cleavon Little (season two) and Nancy Walker, who died towards the end of the show's run in 1992. The following years, Faracy continued her career, appearing in supporting roles on both film and television. She guest-starred on Touched by an Angel, Wings, Murphy Brown, Will & Grace, Frasier, Grey's Anatomy, Ugly Betty, How I Met Your Mother, Castle, Desperate Housewives, Modern Family, and How to Get Away with Murder. In 2016, she had a recurring role in the Lifetime comedy-drama Devious Maids. Her notable film credits include Sideways (2004) as Sandra Oh's mother, and Mike and Dave Need Wedding Dates (2016) as Zac Efron's mother.