Fannie Mae Homestyle Renovation loans allow for any type of repair, as long as it is permanently affixed to the property. These loans cannot be used for tear down and reconstruction of a new dwelling.
There is one exception to the “permanently affixed to the property” clause, and it's that appliances can be upgraded as long as it's part of a major renovation to a particular room.
For example, if you are remodeling a 1970’s kitchen, and part of that remodel was updating to 2018 appliances, that would be permissible. You wouldn’t be forced to put the old lime green fridge back in the new kitchen. However, it would not be permissible to buy brand new appliances for a room that wasn't being remodeled.
If you're unsure about whether an improvement is allowed or not, the general rule is that all improvements must be peremantly affixed to the proeprty.