Have a construction loan to developer to build a 28 unit residential apartment to be held for rentals. The borrower originally purchased the site for cash in 2019 and the property currently only has a foundation on the lot.

Is this loan HMDA reportable as a Purchase Transaction or Home Improvement.

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.

Official Interpretation
Paragraph 3(c)(3)
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:

During the construction phase, the guarantor's cash flow and cash reserves will be primary source of repayment. After the property is completed and stabilized, there is an opportunity to refinance the construction loan into a commercial real estate mortgage.

Sounds like temporary financing and exempt then.