Renovation of buildings is a sustainable way to keep the built environment functional. Thus, it is important to find a way to assess the efficiency of a renovation activity. Besides functionality, which is the basic requirement for any building, sustainability has also become a significant factor due to the environmental challenges we face today. This study adopts principles of environmental efficiency in proposing an assessment framework for existing residential buildings that simultaneously reflects functionality and sustainability. A pilot study demonstrates the proposed framework provides useful information for prioritizing critical renovation issues, leading to notable improvements in functionality and sustainability.