I don't see it as home improvement if they are building a 28 unit apartment complex on the property where there is currently no dwelling located.
How will the construction loan be repaid? That will determine if it can be exempted as temporary financing.
1. Temporary financing. Section 1003.3(c)(3) provides that closed-end mortgage loans or open-end lines of credit obtained for temporary financing are excluded transactions. A loan or line of credit is considered temporary financing and excluded under § 1003.3(c)(3) if the loan or line of credit is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time. For example:
The opinions expressed are mine and they are not to be taken as legal advice.