Around 35% of the total housing stock of the European Union is more than half a century old. The shortage of funds for new construction, combined with rapidly changing economic, social, and technological factors, has led to significant obsolescence. Additionally, this situation makes it difficult to satisfy the owners’ energy, functional, and socio-economic needs. This research aims to develop an innovative retrofit approach that brings multiple benefits to assessing retrofit designs for social housing, with specific emphasis on volumetric envelope additions toward the nearly zero energy buildings target (nZEBs). To achieve the purpose of this study, the research through design methodology was chosen. The research methodology consisted of two phases: design and simulation. First, the design phase focused on re-designing and retrofitting social housing to address various aspects of the functional requirements in developing rational solutions. Second, the simulation phase focused on computational modeling and analysis of energy performance to assess the nZEBs target. The results show that the use of high-efficiency Heating, Ventilation, and Air Conditioning (HVAC) systems and improved material envelopes cut electricity consumption use by 43% and primary energy use by 40% compared to the base case. Photovoltaics (PV) production can meet the total electricity demand for six months. This approach can encourage residents and tenants to actively participate in the retrofit process and increase the real estate value of buildings through improvements in energy efficiency and housing function.