Change applies to loans funded from September 1
The Japan Housing Finance Agency announced on August 18 that, for loans funded from September 1, 2026, eligible minor renovation expenses can be financed together with the purchase price of an existing home under Flat 35. The change can simplify financing for owner-occupiers who want to complete limited interior or equipment work before moving into a resale condominium or detached house.
Structural and certain major alterations are excluded
Eligible work must not affect the contents of the property’s Flat 35 compliance certificate. The agency specifically says that moving columns, changing floor plans, increasing or reducing floor area and replacing insulation are not treated as eligible minor renovation work. Contractors’ agreements or order documents will be used to verify the work. Where eligible renovation expenses are included, the compliance inspection is conducted once before renovation and no post-renovation inspection is required.
Buyers can budget purchase and renovation costs together
Existing homes may have lower purchase prices than new homes but can require significant expenditure on equipment and finishes immediately after acquisition. The revised system makes it easier to plan qualifying costs as part of the initial financing package. If some or all scheduled work is not carried out, however, the equivalent unused loan amount must be prepaid. Flat 35 remains unavailable for investment-property purchases.