If you used 100% of the HELOC proceeds for the construction of a new home, all the related mortgage interest is deductible. Why have you checked the box for "No, I used some or all of this loan on a different home or on something other than a home"?
According to IRS FAQ Real Estate:
"You can treat a home under construction as a qualified home for a period of up to 24 months, but only if it becomes your qualified home at the time it's ready for occupancy. The 24-month period can start any time on or after the day construction begins. As a qualified home, the interest paid may qualify as deductible mortgage interest, with certain limitations."
Note: the "certain limitations" refers to the mortgage interest limitation rules.
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