Under what condition may private mortgage insurance (PMI) be required?

Private mortgage insurance (PMI) is primarily required when the loan-to-value (LTV) ratio exceeds 80%. This is because lenders see a higher risk when borrowers are financing more than 80% of the property's value. A higher LTV indicates that the borrower has less equity in the property, which can be a red flag for lenders in terms of potential default. To mitigate this risk, lenders often require PMI, which protects them in case the borrower cannot repay the loan.

The other options do not accurately reflect the conditions under which PMI is required. Fixed-rate mortgages may or may not have PMI based on the LTV ratio; similarly, while a poor credit score could influence loan terms, it's not a universal trigger for PMI. PMI is also not specifically tied to commercial real estate; its requirements primarily focus on residential properties and the associated LTV ratios. Therefore, the condition related to the LTV ratio being higher than 80% is the most accurate criterion for necessitating PMI.