@Eabrill - not sure what example you are referring to, but if you borrow money against your primary home and use that money as the downpayment on a 2nd home, the interest is NOT deductible,
Cash out on your primary home (and that is what this would be) that is not used to improve (i.e. capital improvments) that primary home is not deductible. Clearly, borrowing money against the primary home to create a down payment on a 2nd home doesn't improve the 1st home......hence no deduction.
