Is there a way around this or are my dreams dead because the govt, who wants to fix the housing crisis, will not let a first time homebuyer do something that is perhaps the #1 solution to making housing cheaper in a market like Denver?

Our insurance 'crisis' is real, but on the mend. 8 new carriers were approved last week, but until that settles down and we see where interest rates go this summer, I would be conservative with your numbers. 

Also, keep in mind that as time goes on, unless there is a major catastrophic financial crisis, rents go up, your equity increases over time and the loan gets paid down, and your cash flow becomes higher. 

The crisis of 2008-2010 took me out of the game.

(Stanford)The Crisis of the American Male, driven by housing supply?

The rental space can never be oversaturated because we have an affordable housing crisis in the US.

I am a long term buy and holder.I started with 30 year mortgages, but later refinanced into 15 years, and some 10 years when the government adopted the "Home Affordable Refinance Program" (HARP) at very low rates in response to the great financial crisis.

Talk to him, share how you feel diplomatically and emphasize that you want to find a workable, fair solution for you both.

What if people would just move a little further out....would we still have this alleged 'housing crisis' ?

In hindsight, @Kevin Sobilo's suggestion is a much more diplomatic way to do it that could resolve the issue without going to court.