"Construction" means the first time. The loan officer might use that term, but this isn't a construction loan. It might be 2-phase financing, but that's a long 1st term and I'm going to bet most examiners won't buy into the "temporary" argument.
Back to Dan's original comment about this being "more dwelling". While I don't want to take an opinion since we don't have all the facts, I think HMDA allows you to consider more than just the 50% income or 50% square footage issues. I've seen many buildings that have retail space or restaurants on the first floor and then have 2 or 3 floors of apartments above. The argument was made that the borrower purchased the building because of the business on the first floor. They are also not letting the dwelling space go to waste, but that's not the primary reason for purchasing the building. Hence, HMDA allows you to apply this on a case-by-case basis.
Again, we don't have the facts. You do. You'll need to determine what this building is. And be sure to document your logic. Good luck!