"Income from roommates in a single-family property to be occupied as the borrower's primary residence is not acceptable. Rental income from boarders is acceptable if the boarders are related by blood, marriage, or law. The rental income may be considered effective income if shown on the borrower's tax returns. Otherwise, the income only may be considered a compensating factor and must be documented adequately by the lender."
Because he is your brother...he is allowed provided you meet the guidelines. You must have a lease, you must show the rental income on your taxes, and must be able to prove that he has made timely payments to you.
I hope this clears everything up and wish you the best of luck!
However, if your brother pays you by check or money order and you have been sharing the rent long term than the bank may consider his rent towards your monthly income. The most important factor is weather you can afford the monthly payment without your brother's income. If you can't, I would suggest that either you find a home with a lower payment or you add your brother to the loan so you may use both of your incomes. Because you are buying a single family home, relying on your brother's money to make your payment is considered risky to a bank because your brother could move out at any time and leave you with the full payment. And if you need your brother's money to make the monthly payment, you may be over extending your self. I would suggest that you talk to your family members and find a loan officer that your family has used and trusts, then sit down with that person and go over your situation so you will know what your getting in to. Remember that if the payment seems too steep for you, it usually is!
My suggestion to you would be to approach a mortgage representative in the area. As a Buyer's Representative I always ask that my potential homebuyers become prequalified to know how much home they can afford. If your brother's credit merits it perhaps you can buy the house as partners with both names on the deed and mortgage. I always urge my buyer clients to check with their own bank or credit union first. I can provide you with the names of some local mortgage lenders that may be able to help if you would like. Feel free to contact me with any other questions.
You can find a lot of Hudson Valley New York local and homebuyer information in my blog. Hope you find it helpful