I am reviewing HMDA loans before submission. I want to make sure I understand when to use what GAR code. I'm coming across some loans with revenue code 4 = NA. I understand when to use code 1 (when GAR are $1M or less, business is a start-up), code 2 (GAR over $1M), Code 3 (when bank does not collect or use the GAR in it's credit decision). We have used Code 4 on our Type 9 loans (that's the only revenue code our software will accept for type 9 loans).
Two questions:
1) Are there other reasons to use a Code 3?
2) when would a Code 4 be used?
3) Does it matter if the collateral is multi-family? We have done several loans to construct new affordable housing apartments (using LIHTC's) where the borrowing entity is new. I think in those cases we should use a Code 1. Some of the documentation in the loan file for CRA revenue says NA - I think the lender may be confused and I'm trying to ensure consistency. Or maybe they are trying to tell me they didn't use GAR to make the credit decision. I can't get consistency until I understand when to use what code.