Carl
Level 15

Deductions & credits

Page 7 and Figure B are about points, not about the VA funding fee.

Apparently, you didn't read it all. Page 7 3rd column under "Special Situations", 2nd paragraph "Amounts Charged for Services", the second bullet statement.

Amounts charged by the lender for specific services connected to the loan aren't interest. Examples of these charges are

:Appraisal fees,

Department of Veterans Affairs (VA) funding fees

The way I see it, since the "Special Situations" section starts with the words, "This section describes certain special situations that may affect your deduction of points", the VA funding fee is considered to be included in the total points paid. Remember, points can be more than just prepaid interest. They can include origination fees, Maximum loan charges, etc. It's all treated as prepaid interest and is deductible accordingly.