I'm going to break down your comments and seek some clarity:
I have a loan to provide partial funding of a construction project.
Partial funding is not a factor for HMDA.
]A first collateral assignment of a first mortgage and security interest will be given from one LLC to another LLC and a security agreement will be on residential property.
The underlying LLC will renovate and complete construction of the property into two condominium units , which will be sold upon completion.
Was there a title transfer? IOW, did the second LLC purchase the property from the first LLC? If so, this is a "purchase" for HMDA, as Joker stated.
This is the section of the regulation that will help you understand this position:Lender A originates a loan with a nine- month term to enable an investor to purchase a home, renovate it, and re-sell it before the term expires. …the loan is not designed to be replaced by permanent financing and therefore the temporary financing exclusion does not apply. Such a transaction is not temporary financing (not reportable)… merely because its term is short.
[Commentary to §1003.3(c)(3) #1(v)]