In general, personal interest expenses are not deductible from taxable income. For example, you are delinquent on monthly credit card payments for grocery purchases, so interests were charged on the late payments. The related interest amount is not allowed to offset your taxable income. However, the Internal Revenue Code § 163 made certain exceptions. Among the exceptions are interests incurred from the following residence related indebtedness. 

i)  "Acquisition indebtedness" 

An individual takes out a mortgage to acquires a residence. Interest incurring on the mortgage amounted up to $1,000,000 ($500,000 if married filing separately) can be deducted from the individual's taxable income.

ii) Home equity indebtedness

An individual takes out a loan secured by the residence. The interest incurring on the loan amounted up to $100,000 ($50,000 if married filing separately) can be deducted from taxable income. However, the $100,000 (or $50,000) limitation is reduced to the amount fair market value of the residence's equity which is fair market value of the residence minus the acquisition indebtedness, if the residence's equity value is lesser than $100,000 (or $50,000)

That is, home equity indebtedness cannot exceed its equity value to qualify for interest deduction. 

The following is a part of IRC 163. 

26 U.S. Code § 163 - Interest

(3)Qualified residence interest

For purposes of this subsection—