"Short-term" loan is not the same as a "temporary loan".
Someone else can correct me if I'm misunderstanding this, but I believe the "12 months or less" reference in section 35(a)3 is to distinguish between those temporary or bridge loans that are exempt and those that aren't. Temporary or bridge loans less than a 12 month term are exempt. Temporary or bridge loans greater than 12 months are not.
In your example, I don't believe your "short term" loans is a "temporary loan" as it's a straight payout with P&I likely being paid out of the borrower's regular income. If it's not "temporary" then the exemption rule above regarding "less than 12 months" isn't really applicable.
If the transaction meets all other requirements to be an HPML loan, then it's an HPML transaction.