The way it's all asked to start with is obfuscating the issue of determining if there is Rental Income.

To clarify: any loan has nothing to do with what you are asking.

Who owns the house has nothing to do with what you are asking.

To simplify for your future reference: the person in possession of (occupying) the house (whether owning, or renting from another, and whether there is debt or not) is either letting something else live there and charging them Rent as Income (like getting a roommate off of Craigslist) or letting family live there and having them help pay expenses for living there.

Hope that helps the next person.