1In saucepan, combine apples and water. Simmer, covered about 5 minutes. Stir in lemon juice
2Mix the 1 1/4 cups sugar, cornstarch, and 1 TBSP cinnamon. Stir into apple mixture. Cook and stir until thick and bubbly. Let cool.
3In mixing bowl stir together the flour, 1 cup sugar, baking powder, salt, 2 tsp cinnamon and nutmeg. Cut in 1 cup butter until mixture resembles fine crumbs.
4Combine the eggs, milk and vanilla, and add to the flour mixture, mixing until blended.
5Spread 1/2 of the batter into a 13X9 greased baking dish. Spread cooled apple mixture over the batter. Spoon remaining batter in small mounds over the apple mixture, spreading out as much as possible.
6Combine the 1/2 cup sugar, 1/2 cup flour and 1 TBSP cinnamon. Cut in 1/4 cup butter until mixture resembles coarse crumbs. Sprinkle mixture over batter in baking pan.