For example, are you living in the fix up home or is it rented? On a new purchase, using FHA lending, you need to put down 3%, but even that could be creatively financed.
To solve your problem the answer is not in using your current home as a 'downpayment' without converting equity to cash in some way. But there may be other solutions. I suggest you call to discuss in more detail with myself or one of the other qualified realtors.
The chances of finding someone selling the home you want, who also wants a fixer upper, is slim. However you may have other options. Depending on the amount of equity you have in your home, you might be able to refinance it or get a second mortgage, thus giving you the capital you need for a down payment on the home you want to buy. Another choice would be to sell your home as-is. Don't underestimate the amount of buyers looking for handyman specials. Of course this will also depend on your local market. You should contact a local Realtor and have them appraise your home. Good luck.
You can't use equity as a down payment unless you get a mortgage to extract that equity. Do you currently have a mortgage on the house that needs fixing up? What is the loan-to-value?
There is also a loan from FHA called a 203k rehab loan. You can use this loan on the house you want to fix up. The lender will lend you the cost to fix up the house and it's a 30 year fixed with good rates.
Sr. Loan Officer