I have a question on how banks have seen examiners handle this issue.

You have an Entity (corporation, partnership, trust) rather than an individual as the borrower. The collateral is a Condo and is rental property. I feel this would be coded as a 3 for Occupancy, which is NA because the borrower is an Entity.

Other people I have talked with think we should be coded as a 2, which is for Rental property.

The issue seems to be how can a commercial entity have anything but an investment property and, if so, wouldn't it be NA because it really isn't rental property? I see logic on both sides (at least we have NA for the Race, Sex and Ethnicity).

Based on nothing but the HMDA Guide I might call it rental property since there is no exception carved out for trusts or commercial interests.

Has anyone had this clearly determined for them by an examiner?

The regulation requires you to report the occupancy status of the dwelling being reported if it is a 1-4 family dwelling. If the dwelling is owned by a entity then it is non-owner occupied.

NA for occupancy is only allowed for multi-family dwellings or dwellings located outside a MSA or in a MSA where you do not have a branch. However, even under those circumstances you have the option to report the occupancy status