New Home Down Payment

Thanks to anyone who reads this. 

Three years ago, I purchased a duplex property for my daughter and I.  I thought it was a wise investment at the time since I could rent one side.  I wanted be able to have a yard for my daughter to play in, and to not live in an apartment her whole life.  Over the next two years I married and had another child.  She already had a son, so our household is now 5.  She moved in with us and we now share a 820 sqft upper level apt in the duplex home I own. 

You may ask why not sell the house or use the other unit? 

The housing market is and has been junk.  My property value is low, I am extremely close to having an upside down mortgage, and I can't justify selling a house if it will not help us.  I would honestly like to keep the duplex as an investment property.   The bank has lots of new rules for conventional and FHA loans, so in order to keep the duplex and purchase a 4 bdrm home, I need either 25% home to loan value on the existing home to re-finance to a conventional loan and then take out a new FHA loan with 5% down.  I simply do not have that to give.  If I sell my home, I break even and have nothing to put down.

Since daycare expenses are so high, we started an in home daycare in the other unit.  There is no sense in my wife working when all your money is tied up in daycare expenses.  Unfortunantly, becasue she has not been doing this for two years, her income is not considered when trying to qualify for a loan with me.

We are really stuck in a tough spot.  We are not looking for homes over 150k.  We are modest, hard working people trying to make a difference for our kids.  WE need help.  Will you help us?