We have a loan that is refinance of dwelling with cash out to build a shop. The shop will be built beside the borrower's house. This loan is set up to draw all of the cash out funds at closing and the repayment is permanent financing. Is the shop considered home improvement the same as a pool? This will improve the home property. HMDA reportable as home improvement or just refinance?

Assuming this is a personal use "shop" and avoiding business use discussions, yes under current rules,this will be home improvement.

It kind of sounds like temporary financing, I would be inclined to report this once the permanent financing replaced it. I have seen threads that support the permanent financing that replaces a HI purpose loan should be reported as a HI purpose (I think the argument is that the applicants requested the funds to improve the property with one request - the FI breaks it into two loans); I've also seen where the HI purpose gets lost with the temporary financing and the permanent financing is reported as a refinance.

Yes, if it is two loans, the first will be temporary.