#1 The best grade, taken from the tree's heartwood, 100% edgegrain with no defects. Used for roofing and sidewalls.
#2 Flatgrain with limited sapwood allowed. Limited knots and defects allowed above the clear portion (the part that will show once it's installed). Often used for re-roofing, walls and as a starter course.
#3 Can include sapwood and flatgrain. Limited knots and defects allowed above the clear portion. Used for the undercourse in a two course application, garden sheds, walls of outbuildings, gazebos, etc.
Undercoursing A utility grade for undercoursing of double coursed sidewalls only. Not a roofing material and not to be used as a starter course for roofs.