Finance
A Pennsylvania borrower with a debt-to-income (DTI) ratio of 45% applying for a conventional loan may face:
AAutomatic approval since 45% is well within guidelines
BApproval challenges since most conventional loans target 43% or lower DTI✓ Correct
CAn automatic FHA loan referral
DNo issues — DTI is not a factor in Pennsylvania conventional lending
Explanation
Conventional loan underwriting typically targets a total DTI of 43% or lower (though some programs allow up to 50% with compensating factors). A 45% DTI may face scrutiny or require compensating factors such as significant reserves, strong credit, or a large down payment.
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