No. The interest that accrues during construction is financed into the loan, so it adds to the mortgage rather than lowering it. USDA's single-close construction-to-permanent loan sets up an interest reserve that is built into the loan amount. During the build you pay interest only on the funds drawn, and your full principal-and-interest payment is fixed at closing, with no re-amortization after completion. The construction-period interest is a cost you finance. Nobody absorbs it for you. Two practical notes: - These loans are rare. Only a handful of lenders offer them and the timeline is long, so line up your lender early if this is the plan. - Watch the total cost of building. We'd caution any first-time buyer against assuming buy-land-and-build is the cheap or simple route. Once you total land, construction, time, and financing, it rarely pencils the way it sounds. Run the full numbers before you commit, and confirm current terms with a lender who actually closes USDA construction loans.