Newsflash: How does buying under budget leave room for renovation?

This question obviously excludes cash or high down-payment purchases. So, say you qualify for a 500k loan and are putting minimum down, but purchase a 400k home. Why do people say, “that leaves us a budget of 100k for renovations.” HOW?! It’s not like the bank is going to loan you the extra 100k unless it’s a reno-specific loan. I’ve seen this on HGTV which is obviously not real life, but I see it here all the time as well. I’m sorry if this is a dumb question, but I just don’t get how that works.