Final answer:
The housing expense ratio for an FHA 203b insured mortgage loan cannot exceed 28% of the borrower's gross monthly income.
Step-by-step explanation:
The correct answer is B. 28%.
The housing expense ratio is an important factor in determining whether an applicant is qualified for an FHA 203b insured mortgage loan. This ratio represents the percentage of a borrower's gross monthly income that goes towards housing expenses, including the mortgage payment, property taxes, insurance, and any applicable homeowner association fees. For an FHA 203b insured mortgage loan, the housing expense ratio should not exceed 28% of the borrower's gross monthly income.