Welcome to BOL, Julia. You're certainly diving into the deep end of the pool with this question! We discuss it from time to time, but it's no surprise that you couldn't find one of those threads.
This will get you started:
1. Click the "Search" link above.
2. Enter "utilization" in the "Keyword Search Terms" field.
3. Enter "Richard Insley" in the "Display Name Search" field.
4. Set the "Date Range" to 5 years and submit the search form.
When I ran this search, it kicked out 14 posts from 10 threads. Some of these posts might have links to older (>5 years) threads. The substance of this part of Reg. Z has undergone little or no change since 1981, so anything you find should be current.
Very quickly, you should see that the entire concept for calculating the disclosures (or verifying them) rests on Sections 1026.17(c)(1), (2), and (6). These sections set the broad standards for estimating TIL disclosures for construction and construction/perm loans. Appendix D is provided as an optional tool.
Whether or not you use Appendix D, you are bound by the general principle that all calculations and disclosures must reflect the terms and conditions stated in the contract documents. What do your construction notes say about advances and the accrual of interest? Do you schedule the dates and amounts of draws, or are they based on progress of the construction? Regardless of the percentage of funds in use, what do your notes say about the method for calculating interest: based on the full loan commitment, or (most likely) based on the funds outstanding?
_________________________
...gone fishing.