Social media bombards us with ads. (Spoiler Alert: That’s the entire reason socials exist… they are ad machines). But how accurate are those ads?

Here is a small example: I saw this the other day and I’ve redacted all non-clip art and identifying information.

“FHA home loans are so popular”.

That’s True. And yes, there is a low-down payment feature. And here is where the problems start.

“As long as your credit score is a minimum of 580”.

Well, yes and no. While the Federal Housing Authority does set their minimum credit score at 580, all lending institutions have additional criteria they all add on to the government-mandated minimum. There might be a very few lenders that will accept a 580 credit score, but with a lower credit score there are always higher down-payment requirements.

“…you are eligible for a 3.5% down payment…”.

No. Not with a 580 credit score. Yes, the FHA minimum is 3.5%, but that is with a 620 credit score.

“…with the possibility of reduced closing costs”.

Um… no. Closing costs are closing costs. Unless this is an outright fallacy, the only way this statement makes sense is if the people who wrote this ad mean the inclusion of the Mortgage Insurance Premium into the loan amount. A buyer is still paying all costs… just over 30 years. With interest.

But FHA loans ARE popular. So the ad was accurate in that. Everything else, not so much.