Minor renovation costs can be financed together from September 1
Japan Housing Finance Agency announced on August 18 that Flat 35 financing for used homes will be expanded for loans made from September 1, 2026. Buyers will be able to include eligible minor renovation costs together with the funds used to acquire the home. Until now, buyers who needed relatively small improvements immediately after purchase could face the burden of using additional cash or arranging separate financing. The change makes it easier to incorporate qualifying post-purchase work into a single housing budget.
Layout changes and some other substantial work are excluded
Eligible work is limited to minor renovations that do not affect the content of the Flat 35 compliance certificate. The agency specifically states that changing column positions, modifying room layouts, increasing or decreasing floor area and replacing insulation are not treated as eligible minor renovations. The special interest-rate reduction available under the Flat 35 Renovation integrated product does not apply. Construction details are verified through contracts or order documents. The compliance inspection is conducted once before renovation, and a post-renovation inspection is not required for the eligible minor work.
Used-home buyers can budget acquisition and immediate improvement together
A resale condominium or house may have a lower purchase price than a new home but still require significant spending before occupation. The change encourages buyers to evaluate the total cost of reaching a usable condition rather than comparing purchase prices alone. Foreign purchasers remain subject to the eligibility and underwriting requirements of Flat 35, which are separate from the legal ability to own Japanese property. Flat 35 also cannot be used for investment properties, so the new renovation financing should not be confused with borrowing for a rental investment renovation.