We originated a loan - 25 year ARM loan - that was a cash out on a dwelling owned free and clear. The customer was using the funds to construct another dwelling to be rented which we did not take as collateral. This was not a typical construction loan that would have a construction phase with a permanent financing stage. It was permanent financing from the beginning and we did not monitor the construction of the dwelling. It was a complete cash out amortizing loan. Would it still be reportable as a purchase?

We would still report that as a purchase.... HMDA states that we can rely on the borrower's stated intent for the funds - in a case like this where we aren't controlling the loan proceeds, we would document what the stated intent was and report it accordingly.

I agree. The loan was a construction permanent loan and those are reportable as a purchase for HMDA.