@DavidD66 - can you please evidence where the 24 month rule is stated. That is the first i have ever heard that and do NOT see it in Publication 936. Based on what I provide below, I challenge the advice on this topic and would encourage @Beaglejazz to review the publication itself.
https://www.irs.gov/pub/irs-pdf/p936.pdf
what it does say is this: (bottom left page 10)
You build or substantially improve your home and take out the mortgage before the work is completed. The home acquisition debt is limited to the amount of the expenses incurred within 24 months before the date of the mortgage.
but what that means is improvements that occurred in the 24 months before you borrow the money qualified as improvement expenses. It does NOT mean you can deduct the interest BEFORE you improve the home.
So let's say you borrow the $200,000 and do no improvements in Year 1, $50,000 of improvements in Year 2 and $150,000 of improvements in Year 3.
In year one, the interest is NOT deductible.
In year 2 , 1/4 of the interest ($50 / $200) is deductible
in year 3. all the interest is deductible.
