As millennials enter a job market decimated by outsourcing, automation and stagnant wages, they now have a new impediment to buying a first home. This summer, FHA loans, which are the number one way first time homebuyers purchase homes, made a significant change to its qualifying standards. The target? Student loans! Previously, buyers' debt ratios would not include student loans that were in deferment, forebearance or in an income based repayment plan. The new rules now require that ALL FHA borrowers with outstanding student loans must have one percent of the student loan balance calculated into their debt/ratio analysis regardless of deferment, forebearance or reduced payments due to income. An example:  A student graduates from college with a four year degree. Average student loan balances are $$30,000-$40,000 with some as high as $100,000 or more! Imputing a one percent payment obligation immediately creates a long term monthly debt burden of between $300-$1,000! Effectively the equivalent of a car or small house payment. Considering there is currently 1.2 trillion dollars in outstanding student loan debt, this change will serve as a catalyst to push more millennials out of the new home market for years to come! Never wanting to end on a negative note, a solution should be in the works. Homeownership remains the foundation of the American dream. The return to a growing, vibrant economy would lift all workers and entrepreneurs to new levels of financial success and should make this new rule less relevant. Potential solutions to be addressed in the next post.  Stay Tuned!