You may be able to put forth a compelling argument it does not apply but IMO the same philosophy applies as it would to a purchase. They don't live in the residence being purchased either at the time the loan is consummated and both the initial construction or the purchase of the borrower's primary residence falls within the definition of a residential mortgage transaction. From the Commentary to 226.15:
15(f) Exempt transactions.
1. Residential mortgage transaction. Although residential mortgage transactions would seldom be made on bona fide open-end credit plans (under which repeated transactions must be reasonably contemplated), an advance on an open-end plan could be for a downpayment for the purchase of a dwelling that would then secure the remainder of the line. In such a case, only the particular advance for the downpayment would be exempt from the rescission right.
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The opinions expressed are mine and they are not to be taken as legal advice.