I am doing a loan for a customer to purchase a primary residence. In lieu of a downpayment, I will be placing a mortgage on a property that he owns and currently lives. He will be moving into the property being purchased. Questions - RESPA? Rescission?

So you're doing two mortgages and disclosures, right?
Both are RESPA.
Neither gets recission.

I will be placing a mortgage on a property that he owns and currently lives.

Rescission will be applicable. See the Commentary to 1026.23(a)(4).

I will be filing two mortgages. He will receive occupancy of the new honme at closing and this will be his new primary residence. He has a rental agreement in place for the previous home.