Great question and this has been a highly debated topic over the years. While not your exact situation, the CFPB gives us this FAQ:
"My financial institution originated a loan to a builder to construct a dwelling for sale. the proceeds of the loan will be used to buy a house, demolish it, and rebuild a house for sale immediately after closing. Is this transaction excluded from HMDA reporting?
No. In the scenario described, part of the loan will be used for purchasing a dwelling in addition to constructing a dwelling for sale. Therefore, the transaction described above is not excluded from HMDA and should be reported as a home purchase loan. A construction-only loan or line of credit is considered temporary financing and excluded from collection and reporting requirements under comment 3(c)(3)-2 if the loan or line of credit is extended to a person exclusively to construct a dwelling for sale. Comment 3(c)(3)-2 to Regulation C, 12 CFR § 1003.3(c)(3)." You said this isn't a refi, so I assume there isn't an existing loan that is being paid off? If not, then I agree that this isn't a purchase and isn't a refi.
Now, is this temporary financing? To answer this, there are two possible scenarios and we probably need more info from you. First, if your loan is short term and the borrower plans to replace it later with permanent financing, it could be temporary financing and excluded from reporting. You didn't imply this, but I just wanted to point it out. Assuming that isn't the case, the other temporary financing option would be a loan "exclusively to construct a dwelling for sale."
Now, others may disagree, but I would say that since you have an existing dwelling at the time of your loan, the loan is not "exclusively to construct a dwelling for sale" and, therefore, would not be exempt as temporary financing (as found in comment 2 to 1003.3(c)(3))
Following the HMDA purpose waterfall, it would appear to be a home improvement loan for HMDA purposes as the loan appears to have the purpose, at least in part, to "improve a dwelling or the real property on which the dwelling is located."
For reference, here is a (really) messy thread that discusses this topic and outlines some arguments and points to consider:
https://www.bankersonline.com/forum/ubbthreads.php/topics/2242264/4