I can get prime-0.51% on a HELOC but I don't love the risk to my monthly payments if rates rise - that is why I like the fixed second mortgage option. 

Looking forward to reviewing these options.

Some of my costs above are optional but not all.

But it would be nice to have an option to uncheck that box this time around since they're already in place.

Creative financing options like seller financing or assuming a low-interest FHA loan can also help you secure better terms.

Would this be the ideal market, or are there other rental options we should explore? 

I am slowly going crazy with how expensive Massachusetts is and I am leaning towards looking at cheaper foreclosure properties.I understand there is some risk to this but I am beginning to think this is the only option I will have because of how fast the market is growing.Thank you for any insight you may have!

I would start there and think of anything that I could do to stay in the house for a while as it sounds like you would be losing a bit of money with the other options. 

Consider house hacking by purchasing a multi-family property with an FHA loan, or explore creative financing options like seller financing or partnering with private lenders.

Talk to the seller, but options are to cancel the sale (and risk losing your deposit), renegotiate to lower the price to allow you to fix the problems or ask them to fix it.