I'm afraid the other expert's answer is incorrect, and the IRS agent's answer is correct, but not complete. The loan you describe is considered a home equity loan, as it's secured by your first primary residence to build a second residence. To the extent secured by the land or new property, it could be considered a mortgage loan if the new residence becomes "a qualified residence" (your main residence, or the designated second residence) within 24 months.
See the flowchart on page 3 of IRS publication 936 (Home Mortgage Interest Deduction), where one of the questions is:
Were all of your home mortgages taken out after 10-13-87 used to buy, build, or improve the main home secured by that main home mortgage or used to buy, build, or improve the second home secured by that second home mortgage, or both?
As you fail that question, some of the interest is considered "home equity" interest (deductible only up to $100,000) rather than "acquisition interest" (deductible up to $1,000,000).
Edited by Arthur Rubin on 7/3/2010 at 4:02 PM EST