The invention provides faint scent type modified phenolic resin for sand mold casting and a preparation method thereof. The modified phenolic resin is prepared by carrying out reaction on solid formaldehyde, phenol, acetone, urea, a modifying agent and a coupling agent and mixing. The modified phenolic resin has a harmless minty faint scent smell; in a preparation process, paraformaldehyde can be completely depolymerized, and the phenomena of formaldehyde volatilization, serious deflation and oozing of water, even production of gel carbonization and the like can be avoided in a depolymerization and heat release process. By adopting the modified phenolic resin disclosed by the invention as a binding agent, a coated sand product is prepared. The coated sand product is high in strength, low in gas release volume and low in viscosity; moreover, the manufacturing requirement on casting parts with high precision and high strength can be preferably met.