We are having trouble figuring out which box to mark on preapprovals. We do not have a formal preapproval program. We however have applicants occasionally request to be preapproved sometimes with an address and sometimes without. For these do we mark NA as we don't have a preapproval program. Or do we mark a 1 for preapproval requested? And for those that did not request preapproval would we always mark a 3 for NA or do we mark 2 that preapproval was not requested? So confused. Thanks!

From the GIR:

Request for preapproval. If the loan applied for or originated is a home purchase loan, indicate whether the application or loan was initiated by a request for preapproval. If your institution does not have a covered pre-approval program, enter the code for “not applicable.” Those instructions are reflected in Appendix A (I.A.8). To determine whether your institution has a covered preapproval program, consult Regulation C § 1003.2 (Application) and comments 1003.2 (Application)-1 through -3. Do not report requests for prequali fication. See comment 1003.2 (Application)-2.

The first step is to determine if you have a program or not. Look at what TMatt87 posted and also review the following FAQ from the FFIEC:
" Program---In general. An element of the definition of "preapproval request" is the existence of a "program." How is it determined whether a program exists?

Answer: A preapproval program exists when the procedures established and used by the lender match those specified in 203.2(b)(2). A program, regardless of its name, is not a "preapproval program" for purposes of HMDA if the program does not meet the specifications in the regulation. By the same token, a program may be a preapproval program for purposes of HMDA even though it is not so named. The question is whether the lender regularly uses the procedures specified in the regulation. If a lender has not established procedures like those specified in the regulation, but considers requests for preapproval on an ad hoc basis, those requests need not be treated as requests for preapproval under HMDA. Failure to establish and consistently follow uniform procedures, however, may raise fair-lending and safety-and-soundness issues."

If you have a program, you will use codes 1 &2 for purchases and code 3 for all refi/HI loans. If you don't have a program, you will list NA for everything.

Also, an application that has an address is not a preapproval, IMHO.