I agree with Elden, different families living under the same roof does not work. It's hard enough for a couple, much less a couple, a parent and a single person all together in one house. With every additional person that house gets smaller and smaller.

Here's a suggestion, is it possible to create a small apartment with completely separate living facilities (to include an enterance) with the improvement money they have? Probably not, but this is the only condition I would consider if I were you.

One more comment, I know this is your brother and you love him but you can't be sold on the old "it's only temporary and we'll even pay you rent" story. In this case the only definition of temporary is "not permanent" and that can be a looonnnngggg time so don't fall for that one.