You should consult your mortgage broker as he can tell you that how much down payment you will need to purchase home. I think the down payment you have is not enough so you should ask mortgage broker.

I guess nothing is stopping you.

I already have a preapproved mortgage with 5% down. What is to stop me from taking out the 90% equity on the condo right now then later purchasing the new property and adding condo rental to the qualification numbers?

The downpayment required now is 10% and you might need as much as 20%.

I own a vacation home and a condo. I want to take equity out of my condo for a down payment on a new house to live in and then rent out my condo. How much equity can I take out of the condo and still make a 5% down payment on the new house?