You are denying the loan due to collateral - you would report Code 4 - Collateral
Proportion of Balances to Credit Limit would IMO be credit related - Code 3 - Credit History
Keep in mind you don't have to be as specific for the denial reason on the HMDA data as you do the AAN. I try to avoid using other if at all possible.
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The opinions expressed are mine and they are not to be taken as legal advice.