When you don't have money for a downpayment, you should not be trying to buy a home because no matter how you do it, you will be overleveraged and have no reserves for repairs, etc.

This is a new underwriting guideline of the insurance companies because they haven’t been profitable and must raise the rates and lower the risk factors in order to comply with state regulations on adequate reserves and future solvency.  

Naturally your old property must sell before you can take title to the new one, but it gives you a much better head start on the negotiation process of your replacement property.

I'm covering the leverage and have reserves in place for any capex expenses.

House 1 you’ve owned for 9 years, how are your cash reserves?

Can you show reserves factoring the DP and closing costs?

Can you put some reserves into a "lock box" type account that is your money but locked at escrow for up to a period of time.  

I like smartcore from Lowe's, natural wood look with texture.

Personally I try to reserve my HELOC for emergency or unexpected costs during a project, so if you can try not to use all of it for the initial purchase and planned rehab.

All monies from reservations we have get deposited into our account, and then at the end of the month we do monthly statements and pay our owners out of our account.