I've obviously allowed my idealism and view of what could be to get the best of me.

I mean don't get me wrong it wouldn't be ideal but worse case situation the math still worked.

Medicine, auto, aerospace, construction etc. 

You guys are so doom and gloom, come on man, the fed (that caused all this btw) is going to save EVERYONE, Banks, credit unions, trust and mortgage companies, investment banks, underwriters, brokerage firms, hard money lenders, stock speculators, the airline, auto, restaurant,hotel, bar, retail, casino, and travel industries,money market funds, the repo market, the global fx market, the stock market (direct purchases soon), the bond market, the derivatives market (oop's sorry ronin capital), consumer spending (helicopter money only 3 weeks away), your local bowling league and oh yea, air bnb.Don't worry the largest financial event of our lifetimes, BY FAR, will be over in a jiff and you will be rested and ready to get back to work!

Ideally, I would like to add a full bath and have my home appraised as a 3/2 and use the added cash-out towards my next home.

Leaving too much time on the table has a tendancy to sour a deal in my opinion, though it is ideal for you as an investor in uncertain times. 

There's no shame in getting it filled less than ideally to help prevent bleeding funds. 2.

This allows auto deposit for tax refunds and/ or ei payments.

I will be revising our application to make it more fool-proof and will be setting rules for what dictates auto-rejection to save us time.

Although not ideal, I think this is much better than forking out $500+ a month to rent somewhere vs. paying down my own home.