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Preheat the oven to 350°F. Butter three 9-inch round cake pans, line the bottoms with parchment paper and butter the parchment. Dust with flour, shaking out any excess.
In a large bowl, beat 1/2 cup of the butter and granulated sugar with an electric mixer on medium speed until light and creamy, about 3 minutes. Add applesauce, 1 tablespoon of the vanilla and eggs, one at a time, beating well after each addition. In a medium bowl, whisk together flour, baking soda, baking powder and 1/4 teaspoon of the salt. Add to butter mixture in three additions, alternating with buttermilk and beating well after each addition. Pour batter evenly into prepared pans and bake until cakes just bounce back when touched in the center and a toothpick inserted in the center comes out cleans, about 30 minutes. Set aside to let cool completely.
In a large bowl, beat remaining 1/4 cup butter, powdered sugar, milk, remaining 1 teaspoon vanilla and remaining 1/4 teaspoon salt with an electric mixer on medium speed until light and fluffy, 2 to 3 minutes.
Loosen edges of each cake with a knife. Place 1 cake layer (top side up) on a large plate, discarding parchment paper. Top with 1/3 of the frosting. Repeat with remaining cakes and frosting (leave sides unfrosted) and serve.