Yes, you can deduct the interest on the construction loan.

Please read this Community answer for more information.

Interest on the construction loan can be treated as deductible mortgage interest as long as you meet 2 conditions.

1. You complete construction within 24 months.

2. At the end of construction, the construction loan is converted into a mortgage.

If you fail to meet either condition, you would have to go back and amend your prior tax returns to remove the interest deduction.