If you did not take cash out as part of the refinance then the funds were used to purchase the home secured by the loan. You would answer "Yes." If you took cash out and used all of that cash to improve the home then you answer "Yes" as well. If you took cash out and you used the cash for something else then you answer "No" and the interview will ask you more questions about the loan.
Ultimately you only get to deduct the portion of interest paid on loans that secure your home(s).
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