No, the VA Funding fee is a deductible expense, not an addition to cost basis.

Closing costs, including the below are not tax deductible but may increase the cost basis of your home which may benefit you in the event of sale.

1. Attorney fees in connection with obtaining property
2. Commissions
3. State stamp taxes and transfer taxes
4. Tax service fees
5. Title policy fees or title insurance
6. Miscellaneous abstracts of title, surveys, recording of deed
7. Appraisal Fee