When would NA (code 3) be used for application channel? Is it just for a purchased loan? Otherwise it seems we would know the application channel. Also the commentary doesn't address it from what I can see.

From the HMDA Small Entity Compliance Guide page 56:

For purchased Covered Loans, a Financial Institution reports that this data point is not applicable. 12 CFR 1003.4(a)(33)

Presuming you are talking about field 93 - Submission of Application, the "Reporting Not Applicable" CFPB guide indicates that the only time you would use Code 3 - NA would be for purchased covered loans.